The duplicity of spending cuts

A Washington Post analysis has shown why Governments find it so hard to cut budgets: they don’t really want to.

The Post examined the detail of spending cuts claimed by the US Government in April 2011 and concluded that the cuts were “an epic kind of Washington illusion”.

It found that about $17.4 billion in cuts were made by stopping activity that had already been canceled.

In the real world, in fact, many of their “cuts” cut nothing at all. The Transportation Department got credit for “cutting” a $280 million tunnel that had been canceled six months earlier. It also “cut” a $375,000 road project that had been created by a legislative typo, on a road that did not exist.

At the Census Bureau, officials got credit for a whopping $6 billion cut, simply for obeying the calendar. They promised not to hold the expensive 2010 census again in 2011.

Today, an examination of 12 of the largest cuts shows that, thanks in part to these gimmicks, federal agencies absorbed $23 billion in reductions without losing a single employee.

“Many of the cuts we put in were smoke and mirrors,” said Rep. Mick Mulvaney (R-S.C.), a hard-line conservative now in his second term. “That’s the lesson from April 2011: that when Washington says it cuts spending, it doesn’t mean the same thing that normal people mean.”

From my experience, there’s two different forces driving this outcome:

1) Governments want to appear to the public bold and decisive, so are prepared to include in their calculations things that aren’t real cuts.

2) Officials want to help the Government reach the target, so look for the easiest things to cut  They don’t really want to go through real baseline reviews because they are hard work, cause pain, and hurt stuff that staff, peers and stakeholders don’t like.

These two forces effectively collude to ensure Government attempts to cut spending usually only suspend or temporarily lower, the year on year increase in the cost of government.

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