Crunched by The Numbers
Billion, Trillion, Schmillion. It All Adds Up to a Big Negative

By Joel Achenbach
Washington Post Staff Writer
Thursday, March 8, 2007

As you may have heard, the latest White House proposal for the federal budget amounts to a bazillion gazillion dollars, give or take a jillion. The great news is that, according to White House calculations, the budget deficit has been cut in half, a feat achieved primarily by running up the deficit to such grotesque levels that the halving of it is like drinking too much and then passing out.

The president boasts that the budget will be running a surplus by 2012, though this hypothetical surplus is based on such things as the sudden outbreak of World Peace.

What's true, however, is that the projected federal deficit of $239 billion for the 2008 fiscal year is considered so low compared with the recent horrifying budget deficits that officials are high-fiving one another over their fiscal restraint.

"It becomes like Monopoly money," says new Democratic Sen. Claire McCaskill, the former state auditor of Missouri, who has been eyeballing how the government spends money. "It's not real."

The federal government will spend nearly $3 trillion this year, which is about a trillion dollars more than when George W. Bush took office. The United States is a big, rich country, with a central government that is arguably the most powerful secular institution ever to exist on this planet -- a government that makes the Roman Empire look like a bowling league.

But anyone who looks closely at the budget quickly gets a scrunched-up brow. The "mandatory" portion of the budget, the entitlement programs, is surging. Health care is a grave concern. Baby boomers are reaching retirement and they're all going to want new hips.

We must do something, the president says. We must do something, the congresspersons declare. We must do something, the actuaries insist. But this involves discomfort, disappointment, recriminations. Fewer benefits or more taxes. The political leaders stand at the edge of a very cold pool. You go first, they tell one another. No, you.

President Bill Clinton left office with the budget in the black, and in December 2000, the Congressional Budget Office projected a 10-year surplus of $5.6 trillion. Recession, war, the Bush tax cuts and an earmark-crazy Congress made that anticipated surplus go poof.

And so today, even with a strong economy and increased tax revenue pouring into the Treasury, we run deficits, and borrow money, and subsidize our operations by pilfering all the money in the Social Security trust fund.

The general public struggles to remember the difference between the annual deficit and the overall federal debt, and perhaps that's a good thing, since the national debt is a number so horrific it comes close to being the literally fatal number once dreamed up by Ian Frazier in a story in the New Yorker: a killion.

Including what we owe to ourselves for our many years of spending the Social Security money that we were pretending to save, the debt stands at approximately $8,821,053,163,042.

It's a testament to the vigor of the American economy and the hard work of so many hundreds of millions of people that nearly $9 trillion of debt is not considered crippling. Indeed, there are people who say that, looked at a certain way -- as a percentage of our entire economy -- it's not really that much money.

Eight trillion 800 billion and change.

Is that a lot? You might want to think about it, since you owe it.

To the Chinese, among others.

THE FEDERAL BUDGET IS FUNDAMENTALLY A DULL AND TEDIOUS SUBJECT, like topsoil erosion, only not as glitzy. The national debt in its wildest fantasies wishes it could be as sexy as global warming. When you meet a "deficit hawk," he or she is usually a nerdy type from one of those sensible flyover states where everyone has plenty of tubers stored in the root cellar.

Like Kent Conrad. He's a Democratic senator from one of the Dakotas, and chairs the Budget Committee. The other day a reporter accosted him in a Capitol stairwell and asked him why the federal government chronically spends more than it receives in taxes.

"It's because it is politically much more popular to be for every tax cut and every spending program. That's what this president has done. It takes a while for the folly of this fiscal policy to be revealed," Conrad said. "The only thing that fixes it is our political will. And the citizenry rising up to tell our elected representatives to stop this."

But the citizenry does not rise. The citizenry has other things on its mind. There's a war going on. There are huge sporting events and Grammys and Oscars and celebrities mating inappropriately and breaking up promiscuously. Hel- lo: Anna Nicole Smith died. The budget exists outside our normal frame of reference. Humans don't actually live from fiscal year to fiscal year; the very concept of a fiscal year has a Parallel Earth quality to it.

We spend money $20 at a time and can't grasp a million, much less a billion or trillion.

Conservatives can celebrate the fact that discretionary federal government spending has, in fact, dropped as a percentage of our overall economy. But entitlement spending has made up for it. In 1979, during Jimmy Carter's presidency, federal outlays were 20.2 percent of the Gross Domestic Product. In 2006, they were 20.3 percent. You'd think there was a constitutional requirement that the federal government represent a fifth of the national economy.

This enrages Grover Norquist, president of Americans for Tax Reform, and the archenemy of Big Government. He says, "You can get people upset about $600 hammers, but not $2 trillion budgets."

Or $3 trillion. The sound bite needs updating.

EVEN IF THE BUDGET IS SO INNATELY DULL THAT IT CAN'T EVEN GET A NOD on the Sunday morning TV gabfests, it still has its small circle of aficionados, of number crunchers who know that the dead of winter is Budget Season in Washington.

At this very second, somewhere in town, men and women are examining tables filled with numbers, most of which, out of convenience or perhaps shame, have had the last six zeros deleted. When dealing with items like Social Security and Medicare and the Pentagon, you can get away with lopping off nine zeros. You know you've hit the big time when you can round to the nearest billion.

"Is it 2.9 or is it just over 2.8, Steve?" asked Rob Portman, director of the president's Office of Management and Budget, during a news conference last month unveiling the administration's 2008 budget.

"We'll give you 2.9," Portman concluded.

Trillion, he meant. He was rounding to the nearest $100 billion.

Funding for the war has been a particularly sketchy budgetary enterprise. That the 2008 budget finally mentions the war money (pages 44-45, "Prevailing in the Global War on Terror") is considered a breakthrough moment in budgetary "transparency."

So far, according to OMB, the government has spent $426.8 billion on the war, and the president is asking for another $235.1 billion to fund the war through the end of the 2008 fiscal year. OMB's five-year budget plan, the one that President Bush says will bring the budget back into a surplus, projects only $50 billion for the war in 2009, and no money at all in 2010, 2011 and 2012. It anticipates peace, in short. "This is our good-faith effort to be as transparent as possible in what we anticipate the needs will be, as far out as we can possibly and reasonably project," Portman said at his news conference.

A reporter asked him if the $50 billion in 2009 was just a "place-holder" number.

"I think we call it an allowance," Portman said.

The numbers created some consternation at a recent hearing of the Senate Armed Services Committee. Democrat Jack Reed asked the chairman of the Joint Chiefs of Staff, Marine Gen. Peter Pace, how many troops will be in Iraq at the start of the 2009 fiscal year.

Pace: Sir, I do not have a projection of troops, per se. Have a projection of continuing to spend about $7 billion a month on the war.

Reed: Well, if I do the math, $7 billion a month is about -- what? -- $84 billion. And that's a little more than $50 billion.

Pace: Yes, sir.

Reed: So there seems to be a huge disconnect between your plans and what your OMB is showing as the cost.

Pace: Projections, sir; not plans.

Thus the message seemed to be if you multiplied $7 billion a month by 12 and then rounded down to the nearest 50 you'd get $50 billion.

BUDGET SEASON MORE OR LESS STARTS THE FIRST MONDAY IN FEBRUARY, when the president submits his budget to Congress. Congressional opponents announce that the budget is "dead on arrival." It's like Groundhog Day, an invariant ritual.

Then there are hearings, dozens of them. The standard hearing involves politicians trying to get administration officials to admit that the president's budget is a pack of lies. The next step is for Congress to produce, by April 15, the budget resolution, which sets the dollar constraints for 19 separate budget functions.

Then the various committees work on appropriations bills -- perhaps you could say that the Spending Season has begun -- which are due to be passed and sent to the president for his signature by Sept. 30, the end of the federal fiscal year. But the process always drags on, deep into fall, sometimes into winter, nudging its way into the next Budget Season. It's a 365-day process, and it's never entirely clear who's in charge. As Norquist puts it, "Everybody touched the ball, nobody touched it last."

The hard copy of the president's budget comes in four volumes, the real star of which is the Appendix. It's 1,237 pages, with tiny type and two columns per page.

This is where you learn about obscure budget items such as the Helium Fund, the Rural Electrification and Telecommunications Liquidating Account, the White House Commission on the National Moment of Remembrance ($200,000 to "to revitalize the commemoration of Memorial Day") and the United States Institute of Peace (shouldn't its employees work harder?).

It's important to keep the millions and billions straight. In the millions category, we see that we spent, in '06, $8 million for a food-stamp program in the Northern Mariana Islands, which is very little compared with, say, the $1.421 billion spent by the Army in '06 on a program whose primary function is to destroy the Army's stockpile of chemical weapons.

THE CASUAL OBSERVER, POPPING IN TO HEAR EXPERTS DISCUSS how the government accounts for itself, would be forgiven for thinking that the government is essentially a vast criminal enterprise -- that it's Enron, only much bigger.

A more generous take would be that the government is so large that it's very difficult for anyone to keep track of where all the money goes or spend it sensibly. Lobbyists know how to get an earmark in the middle of the night when no one's looking. Thus millions might get splurged on a "Bridge to Nowhere" in remote Alaska even as, for example, outpatient war veterans at Walter Reed live in squalor.

Both parties vow to cut down on waste. The White House hit list of programs includes NASA's Red Planet Venture Capital Fund and the Education Department's Exchanges With Historic Whaling and Trading Partners program.

Democratic Sen. Byron Dorgan, meanwhile, cites contractors dumping 50,000 pounds of nails in the Iraqi desert because they were too short and immolating a new truck because it had a flat tire (an Iraq war veteran testified in Congress that "one of the civilian trucks got a flat tire and they did not have the proper wrench to change the tire so the decision was made to torch the truck").

The scariest person when it comes to the budget is David Walker, the comptroller general at the nonpartisan Government Accountability Office. "We face a tsunami of entitlement spending that could swamp the ship of state," he says.

Consider, he says, Medicare's newly added prescription-drug benefit. We'd have to have $8 trillion right now, invested in Treasury bonds, to cover the gap between what we've promised in that program and what we expect to receive in premiums over the next 75 years, by his calculation. The Social Security gap is $6.4 trillion, he says, and the total Medicare gap is $32 trillion. Overall "unfunded commitments" of the government total about $50 trillion, Walker says.

He gives President Bush credit for floating some ideas during his State of the Union address that would cut some of the long-term Medicare funding gap. The proposal received a cool reception from congressional Democrats. They'd rather focus on waste, fraud and the Bush tax cuts that benefit the wealthy.

The first boomers retire next Jan. 1. The Fed chairman, Ben Bernanke, last week warned of a "fiscal crisis," saying federal debt could rise from 37 percent to 100 percent of GDP. And then could keep rising "exponentially."

Big numbers are everywhere. Scary percentages. Hairy trends.

"If you take that $50 trillion," says Walker, "that's $440,000 per household."

And they won't accept Monopoly money.