It’s Time to End the Baseline Games

Comparing different plans to reduce the deficit is maddeningly difficult. This is because any proper comparison between two plans has to be done against the same baseline — and as soon as you say the word “baseline,” you might as well just pack up your bags and go home. You are doomed to a funhouse spiral into insanity as you try disentangle how much Obama’s cuts vs. Obama’s baseline matches up to Paul Ryan’s cuts vs. Paul Ryan’s baseline.

For example: if the Bush tax cuts are extended, they’ll cost about $4 trillion over the next decade. So if your baseline assumes they get extended, then you can claim $4 trillion in deficit reduction by allowing them to expire. However, by current law they’re going to expire on December 31. If you take that as your baseline, you can’t claim any deficit reduction at all by allowing them to expire.

There’s a sense — a very big sense — in which this is ridiculous. Who cares what the baseline is? The Bush tax cuts will cost $4 trillion one way or the other. That’s the price tag for keeping them, and it’s the savings for letting them expire. All that matters is one simple thing: what would the deficit be in, say, 2017 if your proposals were enacted? That’s it.

But Ezra Klein, in an aside to a longer post, very succinctly explains one of the reasons this stuff gets so many people so animated:

People prefer “tough” cuts to cuts they think are easy (though the cuts in question are rarely tough on the people analyzing them). So they give a lot more credit to, say, raising the Medicare eligibility age, as that hurts seniors, than to officially drawing down the war spending, or cutting interest payments, or banking the results of a deal. But the deficit doesn’t care how much the cuts hurt. It’s all about the bottom-line number.

It’s sort of pathological, really. If you save money, you save money. Who cares if you go after the low-hanging fruit first? Nobody should, and yet they do. If your proposed savings aren’t something that’s likely to concretely hurt someone, they’re somehow unserious. Raising the Medicare eligibility age is a real cut; reducing reimbursements to hospitals isn’t. Block-granting Medicaid is a real cut; ending the war in Afghanistan isn’t. Slashing NIH funding is a real cut; reinstating PAYGO isn’t.

But it’s not so. None of us should put up with baseline games anymore. Just show us the proposal and show us what the effect will be in five or ten years down the road. Period. That’s all that matters. And if you can meet your goal without harming too many people in the process? That should be a point in your favor, no?