2 February 2004, David Sirota, Christy Harvey and Judd Legum, TomPaine.com
David Sirota, Christy Harvey and Judd Legum are a trio of writers with the Center for American Progress, a nonpartisan research and educational institute.
In what may be the most deceitful budget submission in memory, President Bush claims that the United States can continue operations in Iraq and Afghanistan, fund a trillion-dollar tax cut, increase spending on defense, homeland security and counterterrorism, and launch a manned mission to Mars, while cutting the $521 billion deficit in half over the next five years. And astoundingly, even these depressing deficit projections are wildly unrealistic. They rely on a grab bag of gimmickry and distortion that, taken together, dramatically underestimate the scope of America's fiscal crisis. A more sober budget projection reveals that, five years from now, the budget deficit will be $477 billion—almost exactly what it is today.
When President George W. Bush took office, the non-partisan Congressional Budget Office (CBO) estimated that from 2002-2011 there would be a total surplus of $5 trillion. Now, over the same period, the country is projected to amass a $4.3 trillion deficit—a total deterioration of $9.3 trillion. And a new poll shows this is on America's mind —88 percent of Americans now say the federal deficit is either a "very serious" or "somewhat serious" problem.
The president continued his attempts to blame Congress for the massive deficits that he has racked up, but a new study by the Center for Budget and Policy Priorities (CBPP) shows how ridiculous this argument is. All told, tax cuts account for 35 percent of the $9.3 trillion deterioration in the budget outlook since Bush took office—more than even the post-9/11 defense and homeland security spending increases. That is almost $3.3 trillion in deficits over the next 10 years due to tax cuts. For a graphic representation of how specious the president's argument is, see this new American Progress graph. As New York Times columnist Tom Friedman says, the administration's total disregard of fiscal discipline has led to "budgets of mass destruction."
The president's budget does not include any funding for military operations and reconstruction in Iraq or Afghanistan beyond September 30. The administration used the same gimmick last year, then requested $87 billion in additional funds. It has already been reported that the administration plans on requesting at least $50 billion in additional spending for Iraq and Afghanistan—but only after the November elections.
The president has repeatedly called for his tax cuts, many of which are scheduled to expire over the next several years, to be made permanent. But his budget excludes the true cost of extending the tax cuts—estimated to be $1.7 trillion over the next 10 years—by only projecting the budget for the next five years instead of the traditional 10. In 2012, for example, the CBO estimates extending the tax cuts will cost $275 billion.
The alternative minimum tax (AMT) was designed to make sure that the very rich pay some taxes. But because the AMT is not indexed to inflation, without reform, millions of middle-class families will be subject to the AMT and face tax hikes. Instead of dealing with the problem—and protecting middle-class taxpayers over the long term—the president's budget includes a one-year, $23 billion "patch." The CBO estimates that over 10 years, fixing the AMT would cost at least $469 billion.
The White House estimates a deficit of $521 billion for 2004—more than $40 billion dollars higher than the CBO estimates. The Washington Post reports that "budget aides in both parties noted that the higher number makes it easier to say the deficit would be cut in half in five years." Another explanation for inflating this year's figures: "A higher deficit forecast now could also help Bush show progress when his budget office delivers its updated projection in July." A White House official dismissed the criticism saying, "It's not at all unusual for projections to be different."
Landing as it does in the beginning of an election year, you can be sure that Congress and the White House will play hot potato with the question of who is responsible for government spending and the bulging deficit.
