Imagining Washington Budget Shenanigans Played Out in a Corporate Board Room

For all the criticism by the Left of corporate corruption, nothing that goes on in even the most dysfunctional corporations matches business as usual budgeting in Washington.  This week in my column at Forbes I present a few vignettes imagining Washington budget logic in a corporate board room.  A sample:

Board Member: Let’s get started.  After an absolutely disastrous year, financially, we’re now five months into our fiscal year and you still have not presented us with a budget for this year.  Why?

CEO Obama: My staff was waiting until their employment contracts were renewed before we presented a budget.

Board Member:  Excuse me?

CEO Obama: You remember — many of my associates in the company had their contracts up for review in November.  They were afraid they might lose their job if you did not like their budget work, so they delayed introducing any budgets until after you renewed their 2-year employment contracts.

Board Member: That seems unbelievably deceptive and feckless.  But let’s leave that aside for a moment.  November was still several months ago, why have we seen no budget since then?

CEO Obama: Well, as you know, I have a number of rivals for my job in this company.  I want to force one of them to suggest a budget first.

Board Member: Why is that?  It seems to me it is your job as leader of this organization to define the budget, particularly given the unprecedented fiscal challenges we face.

CEO Obama:  If I propose a budget first, everyone will just shoot holes in it.  If I let someone else come forward with the budget, I can snipe at it and make my rivals look worse.  In particular, I think that Ryan guy down in Finance may be dumb enough to create a plan.  If he does, I can spend so much time making him look bad you will forget I never submitted a plan of my own.


  1. Rick Caird:

    That about sums it all up.

  2. Don:

    When I worked for the State of Texas, I discussed the difference between government "fund" accounting and "everybody else" accounting. I was absolutely floored by the idea that you assumed you'd have all of last years money to start with and that you were simply deciding how much MORE you wanted next year. It was explained to me that you never gave ground, no matter what happened because that would be suicidal. How else were you going to get raises and buy new stuff? And the funds limit is limitless because it's up the somebody else (the legislature or the Comptroller) to find that money, raising taxes or increasing the valuation of the tax base as necessary.

    I wish I could have done it like that when I ran my business, I'd still be IN business :^).

  3. Tom:

    Very funny

  4. caseyboy:

    For a state and US Senator, who voted present more often than he voted Yea and/or Nay, what do you expect. You know I've really fought the urge to believe there is some sinister financial cabal in the background pulling the strings that will bring down the country so that it can be taken over without further pretext. But I'm finding it very difficult to believe anyone could be this incompetent by accident.

  5. Phil:

    What a poor analogy. CEO Obama not presenting a budget until 5 months into the year? What process are you watching? The president submitted the FY2011 budget in February of 2010 -- 14 months ago. The do-nothing congress never passed the annual appropriations they were supposed to. Now, while Congress should be deciding the FY2012 budget (which the president delivered two months ago), they are still fumbling around with FY2011. Our government is divided into branches, not parties. It's the legislative branch that refuses to budget, not the Democrats.

  6. Chris:

    "It’s the legislative branch that refuses to budget, not the Democrats."

    Who controlled the both houses of Congress and the White House prior to January 2011?

  7. Brian Dunbar:

    The do-nothing congress never passed . . .

    If Congress were truly 'do-nothing' the Federal Register would not be 25,000 pages and counting.

  8. Vitaeus:

    You may end up quoted in my current course, I am taking Practical Fund Accounting at the moment and those are classic examples of the difference between gov't and business functionality ( or the lack thereof).

  9. morganovich:

    and, of course there's the whole issue of being .0001% apart on the budget and shutting the company down over it.

    yes, let's close the whole restaurant because we can't figure out who should pay for that one order of fries someone ate.

  10. marco73:

    Our foreign exchange student couldn't grasp what they were talking about on the evening news about the government shutting down. He didn't really have a point of reference to what a the budget battle meant.

    I explained it to him this way: overnight, someone covers the dining room table 6 feet deep in $100 bills. Every morning, the heads of government departments walk into the dining room and take a pile of $100 bills to pay for everything they have to do that day. Well Friday at midnight, the dining room will be locked, and no one can get their money, so no one in government will work. Now for really important things, like Defense or putting gas into Obama's limosine, someone will use another door to get to the dining room and take as many $100 bills as they need.

    The reason that they will be locking the dining room is that the coke and pepsi parties cannot agree on how many $100 bills should be on the table every morning. One party wants to leave as much money on the table each day as they have always had, and in fact want to add 4 inches of $100 bills every year forever. The other party wants to add only 3 inches per year forever. Because they cannot agree how many more $100 bills to add per year, they are going to lock the dining room so no one gets any $100 bills.

    He thought that was pretty stupid.
    But what he was really concerned about: do I have to go to school on Monday? Um, yes. And every taxpayer in the country will have to work Monday also.

  11. caseyboy:

    Phil, I guess the comment on Obama should have been that he hasn't submitted a serious budget. His campaign promise to "cut the deficit in half" has been met by take the last budget, add 10% and move on.

    marco73, I like the $100 bill analogy.

  12. Doug:

    One interesting aspect to this cat fight is one that should serve as a Teachable Moment. Many of us are used to assigning a president credit or blame for the fiscal policies of the nation during his tenure. But in this dust up, we see how a president's spending record is actually defined. A president and a willing Congress (2009-2010) spends as if there's no tomorrow. A president and an unwilling Congress (2011-?), and spending gets throttled. Ten years from now, might some say "Obama cut spending"? Perhaps. But was it because he wanted to, or because he was forced to by the opposition political party?

    I think it's all bullcrap (if I had my way I'd shut the government down for the rest of the year), but it serves to illustrate how a legacy is created. I.e., a president does not operate in a vacuum.

  13. tomw:

    How about .... we fund the Congress' retirement fund ... AFTER we fund the Soc Sec retirement fund... that is, using all that's left over after what Congrefs has spent...
    They have NO skin in the game. They spend OUR money with no consequence. They spend our childrens' money and THEIR childrens' money without a hint of remorse or guilt. Send them to jail!!!
    To yap about 'moving 73% towards the R's cuts in spending' an claim that is progress is irony on stilts. That is money that DOESN'T EXIST! They are writing checks where there is nothing in the account and complaining about being told to STOP!!! And no one calls them on it.
    Pathos. Fire them all.
    To threaten the pay of the armed forces is the epitome of political farce. Maybe there will be a "march on Washington..."
    I am so tired of this b*llcr*p. We are broke, and won't be able to pay the interest, much less the principal on the debts the idiots have incurred.
    Please excuse rant. I am old, tired, and fed up.

  14. tomw:

    On further reflection. There will be no funds allocated AT ALL for Congress retirement until they have balanced the budget and enacted legislation to balance the budget in full over a the next x years.

    They didn't EARN their pay, so they do not deserve their retirement. A budget is due before the start of the fiscal year. 10/1. It is APRIL, and we are still poking around with the radioactive fallout of the Pelosi Idiocracy. She is STUPID. DUMB. BRAINLESS. Need I say more?

  15. Sam L.:

    tomw: GREAT IDEA.

  16. Ian Random:

    Too bad the MSM never holds demoncats responsible. They never point out even the mildest motivations by government, but everything business is always evil capitalism.