The Magic Budget – UPDATED

Last week, we had Lt. Gov. Michael Fedele on to talk about the budget. The Governor had just released her budget, purporting to close a roughly $6 Billion deficit. In mid to late January, however, according to press reports (literally, every outlet that reported on the budget) the administration had estimated the budget to be roughly $8 Billion. Here is the exchange (all quotes from previous comments omitted for space):

27 Gabe // Feb 5, 2009 at 3:56 pm · delete

Hi Lt. Governor,
Thanks for joining us!
In mid-January, the Governor’s office set the projected 2010-2011 budget deficit at $8 Billion.
The budget released yesterday seems to assume only a $6 Billion shortfall in 2010-2011.
Did anything happen in the last two weeks to explain the difference? If not, why the discrepancy?
Thanks again!

31 Lt. Governor Michael Fedele // Feb 5, 2009 at 3:59 pm · delete

I don’t believe that it was the Gov’s office that issued that number. I believe that it was OFA (Office of Fiscal Analysis) that is a legislative reporting agency. Also the Gov’s budget agency is OPM (oofice of Policy & MGMT).

36 Gabe // Feb 5, 2009 at 4:03 pm · delete

With due respect, I do not believe that is correct. According to the JI:

By mid-January, the Rell budget office had increased this year’s deficit to $922 million. More important, it estimated, without giving precise numbers, that the built-in shortfalls for 2010 and 2011 now approached a combined $8 billion, rather than $6 billion.

So I re-assert my question:

Thanks!

43 Lt. Governor Michael Fedele // Feb 5, 2009 at 4:12 pm · delete

I’m not aware of the JI article. You can’t believe everything you read in the papers. I stand by my prior reply.

That got me curious about what exactly caused every member of the press to report that the administration was expecting a roughly $8 Billion deficit. Here is the reason: Apparently, you can’t believe everything you hear from an administration official at a press conference (mms link, wmv file – will open a separate application) (question at ~7:43 in, below quote starts at ~8:00) (VIDEO UPDATE h/t to tparty):

OMB Secretary Robert Genuario: While we have not completed our analysis… I think you can start with the assumption that the base is a billion dollars lower and that will translate into diminished revenue in that approximate area in each of the next fiscal years.

Q: So 8, as opposed to what was- were saying 6 for the next 2 years…

Secretary Genuario: I think its fair to say that we will be closer to 8 than to 6.

So there you go, the source of the multiple stories was Rell’s OBM Secretary and not the OFA as Lt. Gov. Fedele asserted in the live blog (or media trickery, as he implied).

By the way, I think I have the hang of this whole budgeting thing! It turns out, its easier to close a shortfall if you close it first, and then decide how big it is. Magic!

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12 responses to “The Magic Budget – UPDATED

  1. Great post. Dan Malloy made a very similar point right after the Governor’s speech:

    One of the problems of Rell’s budget, Malloy said, is that the budget was already in deficit as soon as it was introduced because the legislature’s nonpartisan fiscal office had raised the deficit projections only two days before Rell’s address – by $2.6 billion higher than Rell’s projections. In his 14 years as mayor, Malloy said he had never offered a budget with so many holes.

    From here.

    Good to see that people are seeing through this… what a sham.

    /back to doin thangs’

  2. Speaking of magic legislation, it sure looks like the American economy is really taking to the Obama/Geithner “hope and change” stimulus package, more correctly known as an “amorphous mess.”

    If McCain had won in November, do you think that anyone would be talking about the Dow Jones losing 2,200 points between Election Day and Lincoln’s Birthday? Anyone?

  3. Have the Democrats said anything about the budget other complain about Rell? C’mon they haven’t offered one thing…nor have they even acknowledged the severity of the situation. All I see in the paper is Republicans offering up possible remedies.

  4. You want to talk magic? I can’t wait to see the illusionary budget cuts Donovan and Williams come up with. They have to cut something, and they are willing to cut nothing. It should be quite a magic show… like watching Blackstone pull colored knotted hankies out of his ass, or David Copperfield throwing a tarp over eight metric tons of Democrat bullshit and making it disappear.

    It’s time to call government up on stage and saw it in half.

  5. AndersonScooper

    Dobb– do you really blame Obama for the economy being in the ditch? Are the 1.8 million jobs lost in the past three months really his fault? (What scares me is that you believe the answer is Yes.)

    And according to your ideology, we should have skipped both the bailout and the stimulus package? (You seem to say “so what if the banks collapse”, and you seem not to see the danger of contracting consumer demand and snowballing job losses.)

    The funniest thing is that you posit things would be different if McCainwon, even though he was for the bank bailout, and would have come up with a stimulus package of his own.

    Ugh.

    Anyway the stock market will continue sideways for quite some time, and let’s pray together, (without Rush Limbaugh), that consume confidence stays strong enough that we avoid a crash.

  6. Dobb– do you really blame Obama for the economy being in the ditch? Are the 1.8 million jobs lost in the past three months really his fault? (What scares me is that you believe the answer is Yes.)

    No. I blame people who bought homes they couldn’t afford, and the government for encouraging them to do so. I blame Obama for putting together a “stimulus” package that is an absolute sham, and will make things worse.

    And according to your ideology, we should have skipped both the bailout and the stimulus package? (You seem to say “so what if the banks collapse”, and you seem not to see the danger of contracting consumer demand and snowballing job losses.)

    Yes, absolutely. The “stimulus” will not stimulate anything, and bad loans don’t become good loans just because the government backs them. This isn’t hard to understand: don’t buy a house if you can’t afford it. The government shouldn’t be in the business of bailing people out of stupid financial decisions.

    The funniest thing is that you posit things would be different if McCainwon, even though he was for the bank bailout, and would have come up with a stimulus package of his own.

    No. That’s not what I wrote, and if you read what I wrote, you would notice that I never said that. What I said was, if McCain was President, and we had seen a 2,200 point drop in the Dow since the Election, the media would be going bananas. Besides, McCain cost himself the election by getting behind the bailout.

  7. Have the Democrats said anything about the budget other complain about Rell? C’mon they haven’t offered one thing…nor have they even acknowledged the severity of the situation. All I see in the paper is Republicans offering up possible remedies.

    Granted, it is a little more complicated when you deal with the actual deficit rather than the one your Governor Budget Director Chief of Staff plucked out of the air.

  8. AndersonScooper

    What I said was, if McCain was President, and we had seen a 2,200 point drop in the Dow since the Election…

    Dobb–

    Not that facts matter to the insane ideologue, but the Dow was at 9625 on 11/4/08, and of course finished today at 7932.

    I guess real wages went up under George Bush, and 9625-7932 = 2,200!

  9. This whole “magic budget” post is yet another slam piece by Gabe on a Republican along with a total non-starter and red herring.

  10. Nice post.

    Quoth Jack Dobb

    If McCain had won in November, do you think that anyone would be talking about the Dow Jones losing 2,200 points between Election Day and Lincoln’s Birthday? Anyone?

    and then

    … What I said was, if McCain was President, and we had seen a 2,200 point drop in the Dow since the Election, the media would be going bananas. …

    Thanks for the clarification. I too thought you were saying having McCain in office would have prevented the market drop. Which would of course be a ridiculous assertion.

    I am looking at another aspect of our current crisis, for your interest. As in, how the hell did this happen, and why isn’t the market sorting it out like it is supposed to?

  11. Not that facts matter to the insane ideologue, but the Dow was at 9625 on 11/4/08, and of course finished today at 7932.

    When I first posted that yesterday, the Dow was at about 7600.

    Regardless, are you ever going to tell us about “all the major economists” who agree that we need to waste $800 billion to get the economy moving again? Or did you fabricate that one the way The Messiah made up the “Caterpillar will hire back its employees the minute we sign the stimulus package”?

    http://blogs.abcnews.com/politicalpunch/2009/02/doh-caterpillar.html

  12. Not that facts matter to the insane ideologue, but the Dow was at 9625 on 11/4/08, and of course finished today at 7932.

    What’s insane is that the “stimulus” bill contains more than 1,000 pages, and Congress voted on it without actually reading it. What on Earth makes you think that it will have its intended effect? Because Obama said so?

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