Editor's Note: The Small Print

You’re no doubt familiar with the not-so-funny joke that goes like this: You never want to see sausage, or legislation, being made. As I write this in the last month of the last year of the first decade of the 21st century, we’re seeing plenty of legislation being written in Washington that will affect you and your clients. It may also affect our children and grandchildren and interest rates for the next decade or so. The irony is not lost on me that while the Democratic-controlled Congress is eagerly attempting to pass legislation that could increase the budget deficit (as the Republican-controlled Congress did during the Bush Administration, I must add), the American people have rediscovered thrift in the wake of the financial and markets crisis. On November 25, 2009, the Bureau of Economic Analysis reported that the monthly personal savings rate–expressed as a percentage of disposable personal income (DPI)–was 4.4% in October. It’s been as high as 6.9% (May 2009) lately, but before the 2008 fall swoon, it bottomed at 0.8% (April 2008). When the Department of Commerce first measured the U.S. savings rate, in January 1959, it was over 8%, but even as late as most of the 1980s, the rate was consistently in the low double digits.

But I digress. The President argued in a television interview on December 13 that the healthcare legislation that Democrats hope to pass in the Senate before year-end will actually decrease the deficit. The basis he uses for that claim is an analysis by the Congressional Budget Office, which recently found that to be the case, more or less. Part of the nonpartisan CBO’s job is to look at proposed legislation while it’s still aborning, and estimate what it will cost. The fact that its findings have lately drawn heat from both the left and right suggest to me that it must be close to the mark more often than not. (By the way, the blog written by the CBO director, Doug Elmendorf, is now my favorite online watering hole, and will continue to be so for as long as the Congress controls the purse strings, that is, forever).