Fact Checker: ‘Historic’ budget cuts?

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by Glenn Kessler, Washington Post

"This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history."

— President Obama, April 8, 2011

"This week, Congress is moving toward approval of an agreement on the largest spending cut in history to help begin to create a better environment for private-sector job growth."

— House Speaker John Boehner (R-Ohio), USA Today op-ed, April 11, 2011

"Biggest cuts in U.S. history"

—Washington Post front-page headline, April 9, 2011

After a tense few weeks over haggling over the fiscal 2011 budget, the White House and congressional lawmakers cinched a deal that they said will result in $38.5 billion in cuts. As the quotes above indicate, they then quickly called it a historic achievement. Even the news media got into the act, echoing the assertions.

The Fact Checker, however, is wary of raw numbers. Thanks to inflation, dollars (and budgets) get bigger every year. For instance, retail gasoline cost about 25 cents a gallon in 1918 and is estimated to average about $3.70 this year. That sounds like a huge jump, until you realize that the inflation-adjusted price of gasoline in 1918 is $3.61. That’s the proper comparison.

So, how "historic" is this achievement?

Fact Checker: ‘Historic’ budget cuts?

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By GLENN KESSLER, Saturday, April 16, 5:32 PM

“This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history.’’

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— President Obama, April 8, 2011

“This week, Congress is moving toward approval of an agreement on the largest spending cut in history to help begin to create a better environment for private-sector job growth.”

— House Speaker John Boehner (R-Ohio), USA Today op-ed, April 11, 2011

“Biggest cuts in U.S. history”

—Washington Post front-page headline, April 9, 2011

After a tense few weeks over haggling over the fiscal 2011 budget, the White House and congressional lawmakers cinched a deal that they said will result in $38.5 billion in cuts. As the quotes above indicate, they then quickly called it a historic achievement. Even the news media got into the act, echoing the assertions.

The Fact Checker, however, is wary of raw numbers. Thanks to inflation, dollars (and budgets) get bigger every year. For instance, retail gasoline cost about 25 cents a gallon in 1918 and is estimated to average about $3.70 this year. That sounds like a huge jump, until you realize that the inflation-adjusted price of gasoline in 1918 is $3.61. That’s the proper comparison.

So, how “historic” is this achievement?

The Facts

By any measure, $38.5 billion is a big number, especially when the cuts are squeezed into the rest of the year. But the budget is pretty big, too — about $3.8 trillion. So let’s see how these figures stack up against the days when the budget numbers were smaller.

For instance, during World War II, the federal budget soared from $9.4 billion in 1940 to nearly $93 billion in 1945. Talk about an expansion of government! But then in 1946, the budget was cut to $55 billion. That’s a cut of $37 billion, technically less than the $38.5 billion in cuts reached last week. But it’s also a cut of 40 percent, which means it is 40 times larger than the deal that has been described as historic.

Full story: http://www.washingtonpost.com/politics/fact_checker_historic_budget_cuts/2011/04/15/AFrT9PqD_story.html