Essay: Applying Washington’s Budget Lessons at Home

Like almost everyone else, I’m thrilled by the way things are going in our nation’s capital, and wish that I could fashion myself to more closely resemble those paragons of —

What? You don’t agree? Let me check the polling data.

Whoa.

Well, well. It seems that almost nobody agrees with me. Last month, Gallup measured the approval rating of Congress at 13 percent; for all of last year, the average was 15 percent. Gallup oh-so-politely notes that such figures “leave little room for a further drop.” We believers in Congress don’t much outnumber those who believe the moon landings were faked.

So maybe it’s just me — and, apparently it is — but I just love what these folks in Washington have done with the budgetary process. Especially the sequestration part! You know how it happened: the White House and Congress were deadlocked on ways to reduce budget deficits, so they agreed to a way to break the logjam. Across-the-board spending cuts would go into effect this year if they couldn’t finally get to Yes. The idea was that such cuts would be unthinkable — so dire a threat that the players would eventually come to some kind of agreement.

But, of course, they didn’t. So the unthinkable became the unstoppable, because, apparently, nothing is unthinkable in Washington any more. Or maybe nothing is thought through. It’s hard to say.

Today, the effects of this so-called sequester are being felt in big and small ways nationwide. Some 70,000 children could be bounced from the Head Start program. White House tours have been suspended. The Blue Angels and other military demonstration teams have been ordered to stand down, causing many air shows to be canceled.

Not everyone agrees with all decisions made under sequestration. Representative Louie Gohmert, a Texas Republican, was so angry about the suspension of White House tours that he tried to amend a measure to keep the president from spending federal money on his golf outings unless the tours were restored. The idea didn’t succeed, but you have to admire the statesmanship.

This sequestration business is boldness. This is leadership. It’s like a taste of the raw excitement of being ruled by Kim Jong-un.

That’s why I’ve decided to take the logical next step, by applying the wonders of sequestration to my own life and home. I want that kind of boldness in my own finances.

As any investment adviser will tell you, it can be more profitable to limit what you spend than to increase your income by a moderate amount, since you’ve already paid taxes on the money you spend. And our spending, especially on the family equivalent of entitlements, is certainly out of control. Between college loans and a mortgage, we may not be in the hole for trillions, the way the government is, but it sure feels close to us.

Still, rather than planning, budgeting and carefully balancing income against expenses, I’ve decided to live like Washington and just drive the family car along the edge of the fiscal cliff, unilaterally imposing cuts on almost everything we do.

First things first: I canceled tours of our home. It’s no White House — it’s actually kind of beige — and nobody has ever asked for a tour. But our little home has always drawn a fair amount of interest in the neighborhood. (People ask, “You actually bought that house?”) If they want to see it now, they’ll have to wait till the end of the fiscal year.

To please Representative Gohmert, I’ve also canceled all golf outings. (I’ve never played golf, but it’s the principle of the thing.)

Then I called Bank of America, to unilaterally inform it that we would pay less on our mortgage. I ended up speaking with Dan Frahm, a senior vice president at the company. But he did not seem impressed with my genius plan.

“If somebody is experiencing hard times, and that can be documented, then there are options available to help them potentially reduce their payments,” he explained. To him, though, what I was proposing sounded different. “If somebody is just making an across-the-board decision that they are going to make a lower payment than they have a contractual agreement to do,” he said, “that leads down another path, potentially leading to foreclosure.”

That didn’t sound much like the patriotic spirit I had been hoping to encounter. After all, Washington had made decisions and commitments on all of its spending, and was now cutting back. Why couldn’t I? Where was my ability to wave some kind of fiscal magic wand? Clearly, there’s more to this sequester business than I have understood.

I went back to my abacus. So much for the easy cuts. It was time to get serious. I explained the situation to my younger son, Joseph, and told him, “You’re going to have to find a way to be 18 percent shorter.”

“Good plan,” Joseph smirked. He is 17, and about 5-foot-10. He declined to take part in the Procrustean initiative I had devised. “I so enjoy towering over you,” he said.

Next, I tried to make the cats understand that they’d have to make sacrifices via kibble and a less luxurious litter, but they ignored me. I might as well have tried herding them, the spendthrifts.

Then I told my wife that there would have to be some changes in our spending habits. She recently noted that the top rack in the dishwasher was broken, and had considered calling a repair service. Instead, I figured out exactly which part of the dishwasher was broken — an oddly shaped piece of plastic that kept the rack on its sliding track — ordered a replacement online and installed it myself. Budget preserved!

This won’t work for Washington, of course, because that piece of plastic, if ordered by the Pentagon, would cost several hundred thousand dollars. But I felt good about making a dent in our own spending habits. Besides, we already try to live frugally. We go by my wife’s rule on spending: “We can’t afford things unless I really want them.”

I WAS getting frustrated, though. The real savings have not emerged. Where was our cooperative resolve? Why weren’t we moving forward? Why couldn’t we be more like Washington?

That’s when I realized the truth: we’re already a lot like Washington.

Maybe the whole country

is.

Article source: http://www.nytimes.com/2013/04/07/business/mutfund/applying-washingtons-budget-lessons-at-home.html?partner=rss&emc=rss