President Obama broke new ground last year by presenting a budget that assumed changes in the tax law as part of his baseline. Because no one wants to see the Bush tax cuts disappear as scheduled next year or the estate tax go after mere millionaires or the AMT hit a third of all taxpayers, his 2010 budget simply assumed that 2009 tax rules would become permanent and ignored the cost of forgone revenue.

That made some sense, given that Congress would never allow all of the tax cuts to disappear or the AMT to affect so many of their constituents. Building those provisions permanently into the baseline only recognized reality, making budget projections both more reasonable—and more drenched in red ink.

This year the president has taken his baseline approach a step further in a way that makes much less sense. His 2011 budget baseline assumes that two provisions of last year’s stimulus bill—expansions of the child tax credit and the earned income credit—become permanent and join their older siblings in the baseline. (I found this only when TPC colleague Elaine Maag pointed out footnote 5 on page 170 of Analytical Perspectives. Talk about burying the news.) Although I happen to think both provisions make sense, they don’t belong in the baseline until Congress makes them permanent.

The 2010 Green Book is a little more transparent but not much. A footnote to the table of contents and a closing sentence in the appendix reveal the secret.

We all know that we face rough budget times ahead with huge deficits stretching on forever. Dealing with that situation is not made easier by relabeling tax changes to shield them from view.