Don’t you wish you could do a trick like this?
Republican budget writers say they may have found a way to cut the federal deficit even if they borrow hundreds of billions more to overhaul the Social Security system: Don’t count all that new borrowing.
As they lay the groundwork for what will probably be a controversial fight over Social Security, Republican lawmakers and the Bush administration are examining a number of accounting strategies that would allow the expensive transition to a partially privatized Social Security system without — at least on paper — expanding the country’s record annual budget deficits. The strategies include, for example, moving the costs of Social Security reform “off-budget” so they are not counted against the government’s yearly shortfall.…
They include treating the cost of Social Security reform not as a present-day expenses, but more as a prepaid benefit for future retirees that should not be counted against current deficits. Or they may take the costs “off-budget,” meaning Social Security spending would not be included in the calculation of the annual budget deficit.
Over at Start Making Sense Daniel Shaviro tries to give us some idea of how this three-card Monty works and how it stands up to the laugh test.