One of the most unreported aspects of the Bush Administration was the accounting gimmicks that they used to make deficit projections look smaller and the budget they were presenting look better. I remember a few voices like Paul Krugman and Dean Baker would raise their voices about these gimmicks, and how the deficit this nation was incurring was worse than being reported, but our media just let it slide by.
Now President Obama has written an executive order the bans four specific accounting tricks that Bush and his cronies when producing his budget which will be submitted to Congress next week. Bush and his people used these accounting trick to cover the true extent of the damage that Bush's policies were causing to the government's budget. According to Obama administration officials these gimmicks hid a budget that is $2.7 trillion deeper in the red over the next decade than had been reported by Bush officials. The new accounting involves including the spending on the wars in Iraq and Afghanistan, showing what Medicare reimbursements to physicians are expected to be, and the projecting actual costs of disaster responses. The Obama budget will also deal with revenues from the alternative minimum tax. All things that should have been in the budget in the first place. It was always one of my biggest pieces of evidence that the Bush Administration was corrupt, and at heart liars.
In discussing the changes that Obama has called for, OMB Director Peter Orszag explains:
"The president prefers to tell the truth, rather than make the numbers look better by pretending."
Noam Scheiber writes that it will be "kinda helpful to have a budget that actually means something when you're debating public policy," and added the political upside to using honest budget numbers for a change: "Why not make the long-term deficit look as large as possible at the beginning of your term? Not only can you fairly blame your predecessor at that point; the bigger the deficit looks, the easier it is to show progress, which Obama will need to do as he runs for re-election. To take one example, you can't claim savings from drawing down in Iraq if you don't put Iraq spending on the budget in the first place (which Bush mostly didn't)."
John Cole offers the administration some excellent advice:
The very first thing I would do if I were Peter Orszag and company, and this is one of the very few times I actually hope someone in government listens to me, is to go back and re-score the last decade or so of budgets using the new accounting system, so when they roll this out they can say "Here is what this year's budget would have looked like under the old system. Here is what it looks like under the new system. Here are the past ten years worth of budgets under the old system. Here they are under the new system." For political reasons, this simply has to be done.