THE WHITE HOUSE’S TRUTH DEFICIT….One of the most remarkable statements in yesterday’s State of the Union address was this one:
In two weeks, I will send you a budget that funds the war, protects the homeland, and meets important domestic needs, while limiting the growth in discretionary spending to less than 4 percent….By doing so, we can cut the deficit in half over the next five years.
Now, Max will tell you that the budget the president submits is little more than a dog and pony show anyway, but let’s give Bush the benefit of the doubt and assume that Congress passes his 4% budget intact. What happens?
The deficit this year is projected to be about $480 billion. That means Bush is claiming that his budget austerity will reduce the deficit to $240 billion by 2009.
Now take a look at the chart on the right, which shows deficit estimates from the Congressional Budget Office. The baseline estimate for 2009 (heavy blue line at the top) is a deficit of $170 billion.
However, in the SOTU Bush also asked for his existing tax cuts to be made permanent. That’s represented by the light blue area in the chart, and changes the estimated 2009 deficit to about $280 billion.
The Medicare bill has already been passed. This is the dark blue area on the chart, and when you account for that the CBO deficit estimate deteriorates to about $330 billion.
The gray area on the chart represents reform of the Alternative Minimum Tax. It’s a no-brainer that this is going to happen, and that takes the 2009 deficit projection to $390 billion.
This is bad enough already, but now comes the fun part. The CBO figures assume that discretionary spending rises only by the inflation rate, which they estimate at 2.7% per year. But Bush wants to increase discretionary spending by 4%, a growth rate that’s 50% higher than the CBO’s estimate. The blue-gray area in the chart overstates this a bit, but even so Bush’s 4% pledge still increases the 2009 deficit considerably over the baseline estimate. Once you factor in higher interest costs, we’re up to about $500 billion.
So: Bush’s own publicly stated policies along with AMT reform that everyone knows is inevitable will increase the deficit to $500 billion by 2009, yet he claims these policies will reduce the deficit to $240 billion. Every single budget analyst in the White House knows this perfectly well. President Bush knows this perfectly well.
Explain to me again why I’m not allowed to call this a lie?