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Deficit deception

The president just got closer to fulfilling his campaign promiseto halve the national deficit - with a simple stroke of his pen.

A Times Editorial
Published January 10, 2005

If President Bush needs a name for his deficit-reduction plan, he might consider this: Deficit Deceit. That, at least, would be an honest description of a plan based on made-up numbers, wishful thinking and purposeful obfuscation.

During his re-election campaign, Bush promised to halve the budget deficit in the next five years. Even with an honest effort, that would be a formidable task considering the budgetary hole in which the nation finds itself. As it turns out, the administration isn't going to give it an honest effort.

Instead of using last year's actual $413-billion deficit to measure success, Bush is reportedly going to substitute an inflated projection of $521-billion. So with the stroke of a pen, the goal just got magically closer. Half of the larger amount will be a lot easier to reach, never mind that it is a phony number.

Real progress still will be difficult, given the administration's spending ambitions and intention to make existing tax cuts permanent, not to mention a likely repeal of the alternative minimum tax. So the plan conveniently assumes a highly optimistic (some say unrealistic) doubling of new tax revenues in the coming year, even though the administration's own projections for economic growth are flat.

Still taking no chances, Bush will leave significant expenses out of the budget, including the $100-billion cost of the wars in Iraq and Afghanistan, as though there is no real price to pay for those painful conflicts. And there will be no mention of a key item on his agenda - privatization of Social Security - that is expected to cost a staggering $2-trillion over the next couple of decades.

We are accustomed to exaggeration when it comes to campaign promises, but such deception in federal budget projections carries great risk. Deeper deficits would put an undue burden on future taxpayers and undermine our credibility with foreign investors, who have so far been willing to buy the growing supply of treasury bonds.

Beyond that, we can't understand why Bush would choose to start his second term with such an obviously deceitful budget. He may find out that Americans aren't so easily fooled.

[Last modified January 10, 2005, 01:15:16]

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