It depends on what the meaning of ‘half’ is

June 1, 2005

I know this is fairly routine, but as long as Bush keeps mentioning it, I’m going to keep debunking it.

At yesterday’s press conference, Bush boasted, “The House and the Senate have worked together to pass a responsible budget resolution that meets our priorities and keeps us on track to cut the deficit in half by 2009.” There’s no polite way to say this, but the president’s claim is painfully, obviously, and demonstrably false.

Proponents of the conference report on the Congressional budget resolution recently adopted by the House and Senate have claimed that the resolution reduces the deficit over the next five years. They have used this purported “deficit reduction” to justify the resolution’s $35 billion in entitlement cuts over five years and $212 billion reduction in funding for annually appropriated (discretionary) domestic programs over that same. But the claim that the budget resolution reduces the deficit is baseless. In fact, the budget resolution increases the deficit by $168 billion over five years.

The non-partisan Congressional Budget Office noted that Bush’s current budget would increase deficits by $1.6 trillion over 10 years. In the short term, the deficit was $412 billion in 2004, and is due to grow to $427 billion in 2005, which means Bush is on track to successfully cut the deficit in half … approximately never.

In fact, the best way to put the budget back towards some semblance of balance is to allow Bush’s tax cuts to expire on schedule — which happens to be the one solution Bush completely ruled out at yesterday’s press conference.

“Actually, in my budget, as you know, the budget I submitted, we — was one that encouraged permanency. I believe it’s essential that we have the tax cuts be permanent. It was implicit in my statement. I haven’t changed. Appreciate your clarification. Congress needs to make the tax cuts permanent.”

It would cost the Treasury over $2 trillion if Bush’s tax cuts are made permanent.

We can continue on our current path — and Bush can continue to believe that he’s “fixing the deficit” — but as the Brookings Institution’s William Gale and Peter Orszag explained today, we’re “living on borrowed time.”

The situation is pretty simple. The private sector is saving next to nothing. The federal government continues to borrow substantial amounts. As a result, national saving — the combined thriftiness of government, businesses and households — is at its lowest level since the Depression, and the nation is borrowing massive and growing amounts from abroad. All of this is coming at the worst possible time, as the nation prepares for the tremendous pressure on Medicare, Medicaid and Social Security created by the imminent retirement of the baby boomers and rising healthcare spending.

A family that saved nothing, borrowed a lot and lived well beyond its means just as it was nearing retirement would raise obvious red flags. The problems are no different — only bigger — at the national level. Low saving reduces our future national income. Borrowing from abroad is a deceptive palliative. Because our foreign creditors have to be paid back, foreign borrowing mortgages whatever future income the country generates.

The Bush administration and its apologists have responded to this situation with a mixture of denial and obfuscation. First, we are told that the current account deficit is a good thing because it indicates that the U.S. is a good place to invest. This would ring true if historically high borrowing from abroad were matched by historically high domestic investment, but it is not. Rather, we are investing about the same as in the past but borrowing a lot more.

Reagan reversed course on his tax cuts to help keep the deficit from spiraling out of control. Clinton raised taxes on the wealthy to become the first president to produce a surplus in over a generation.

And Bush entered office promising to keep a balanced budget and pay off the national debt. We’ll be paying the price for his reckless dishonesty for a very long time.

Just another reason this Bush administration should be impeached.

I heard Bush was bringing his social security road show to Minn. anybody have any info?

  • Yes, I voted for Bush. He will one day be long recognized as a stalwart leader against Islamo-facist terrorist and bringing democracy to the Middle East. BUT I stand agape at how he feasts like a hog a the trough when it comes to federal spending, and yes, how he LIES about how much the drug benefit to medicare was going to cost, and how he hasn’t vetoed a spending bill yet. And yes, this conservative is including the military in that overabundance. We do need to fund the war on terror, but it shouldn’t cost what it is costing, and SOMEBODY IN THE PRESS needs to shine the sanitizing light of truth on the kinetic ballistic missile defense system. I know first hand it is a pathetic failure and waste of taxpayer dollars.

  • cowboy: I’m from Minnesota, and I’ve seen/heard nothing to date about the President’s Personal Privateering Processional coming up here.

    As to the Administration’s assertion that it is “on track to cut the deficit in half by 2009” is a crock. As noted by the Center on Budget and Policy Priorities notes that any claim by this Administration to this effect :

    1. What number are we starting with?

    “The Administration has hailed the 2004 projected deficit as evidence that its policies are working. The Administration notes that the $445 billion deficit it now forecasts for 2004 represents a significant improvement compared with the larger, $521 billion deficit it projected last February.”

    The problem was that The Administration’s February forecast “artificially inflated the projected deficit for 2004, apparently so that subsequent downward adjustments in the deficit estimate could be presented as progress rather than as being, in significant part, the substitution of more realistic estimates for overstated ones.”

    2. Is there anything not being included in calculating the deficit which realistically should be?

    “(T)he Administration omits major costs from its projections for those years, such as the costs of continuing relief from the Alternative Minimum Tax, something that the Administration has made clear it favors. Moreover, the Administration’s budget figures extend for five years rather than ten, leaving out the years from 2010-2014 when the baby-boom generation will begin to retire in large numbers and the deficit is expected to rise.”

    Further reading, from the Washington Post: “Record ’05 Deficit Forecast“.

    And this, from Andrew Samwick: “CBO’s Budget Outlook“.

    And this, from the good old Congressional Budget Office itself: “The Budget Outlook“.

  • There is no spending for Iraq/Afghanistan in the budget…it’s BS. Did Congress just appove another 80 billion for Iraq? Not in the budget…Geez, what an idea..I think I’ll cut my personal deficit..I’ll just ignore my mortgage payment while budgeting..Wonder how long I can get away with that. If you have common sense..you don’t need the CBO to analyze anything.

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