Yesterday we learned that the budget deficit is expected to rise to $427 billion this year, a bit shy of the administration's prediction that it would fall to $331 billion.
I love this:
In a briefing for reporters on Tuesday, senior administration officials insisted they were still on track to fulfill Mr. Bush's campaign promise of reducing the federal budget deficit by half by 2009. But Mr. Bush is already well behind in reaching his goal.
They insist that they're "on track," though they're unequivocally not on track. And most of the country still has it's fingers in its ears.
The Center for American Progress digests all this nicely, with plenty o' swell links.
THE SHELL GAME EXPOSED: Astoundingly, the White House seized on the CBO numbers as proof that the president would meet his goal to cut the deficit in half by 2009. Here is how it works. The administration takes the CBO's baseline 2009 deficit projection, which excludes funding for operations in Iraq and Afghanistan, the administration's $2.5 trillion proposal to extend tax cuts, and the administration's $2 trillion Social Security package. Because of these exclusions, even the CBO admits its long-term budget numbers are "misleading." But even if you take the CBO's misleading 2009 deficit projection and compare it to the actual 2004 deficit, Bush will still "miss his goal." So the administration takes the misleading 2009 projection and compares it to the higher deficit projections for 2004 it predicted last February, but which never actually materialized. The February numbers, however, "artificially inflated the projected deficit for 2004, apparently so that subsequent downward adjustments in the deficit estimate could be presented as progress." The bottom line: there is no way the administration can pursue its current policies and cut the deficit in half by 2009.
IT'S THE TAX CUTS, STUPID: The deficit could be reduced by more than half this year if the administration would roll back its tax cuts for the wealthy. An analysis by the Center for Budget and Policy priorities found there have been $504 billion in increased costs since January 2001 and tax cuts account for just about half (49 percent) of that total. Tax cuts have cost the nation four times as much as all changes in domestic programs over that time.
THE ENTITLEMENT CON: Conservatives will use the numbers to justify cuts in benefits for the poor and the elderly. Using deficits as an excuse, "Senate Budget Chairman Judd Gregg (R-NH), and House Budget Chairman Jim Nussle (R-IA), have both indicated that they want to cut spending, particularly on entitlements." But programs like Social Security and Medicaid aren't why we have a deficit. (In fact, absent the Social Security program, the deficit would be much worse.) As the CBO notes, "new legislation accounts for about three-quarters of [the federal deficit] increase [since last year's projections], most of it from recent laws that extend certain tax provisions."
