Tuesday, January 11, 2005

Bush to Fulfill Deficit-Reduction Promise With Accounting Tricks

During the 2004 presidential campaign, President Bush promised to cut the mountainous federal deficit in half by 2009.

But according to the Jan. 2 edition of The New York Times: "To make Mr. Bush's goal easier to reach, administration officials have decided to measure their progress against a $521 billion deficit they predicted last February rather than last year's actual shortfall of $413 billion. By starting with the outdated projection, Mr. Bush can say he has already reduced the shortfall by about $100 billion and claim victory if the deficit falls to just $260 billion."

But wait, there's more ...

In addition to using a phony starting point for deficit reduction, the administration's math includes record rises in tax revenues ($217 billion in 2005, which would be the biggest one-year jump ever, and $800 billion over five years). And it fails to include the costs of wars in Iraq and Afghanistan, which are expected to reach $100 billion in 2005 and remain high in subsequent years.

The budget also avoids expensive costs just outside the five-year deficition-reduction window. For example, if Bush succeeds in privatizing Social Security, that would cost an estimated $2 trillion. To make Bush's tax cuts permanent would cost an estimated $1 billion. The Medicare prescription drug program would cost an estimated $500 million. To address Bush's concerns with the alternative minimum tax would cost an estimated $400 million.

Has there ever been a more deceptive budget plan?

Stanley Collender, noted author and columnist on federal budget issues, put it best: "I've been watching this more than 30 years, and I've never seen anything quite this egregious."


Anonymous Anonymous said...

Not sure i understand the point here.

if you think expenditures are out of hand, i agree.

if you think Bush or anyone else has a chance of significantly cutting the deficit while in a war, good luck. Twist the numbers as much as you want but it wont happen.

if Bush even shaves off the 200 billion you speak of, it will be considered an accomplishment. and if you ask me, an amazing one. it wont happen.

i dont understand the tax revenue info you post....are these predictions. If so, whats the difference since, after the fact, this will be mneasured against actual numbers, not predictions.

Social security- i am at a loss since everyone tells a different story. congress should be open to all ideas on this. but the facts are being twisted by everyone. pathetic.

AMT: this is a shameful secret of both parties and i give credit to anyone who finally does something about this ridiculous tax that has cost the middle class a fortune, is unfair, and is getting exponentially worse each year. there is noone who can mount a valid defense for this tax other than to just admit they dont want to upset an unfair cash cow currently in place.

2:47 PM  
Anonymous Anonymous said...

The point is that the Bushies are choosing to spin away the budget deficit, rather than actually be honest with the American people.

They are using statistical tricks, because if they did use honest math, they would likely have to report the budget deficit increasing this year.

Watch the Bushies put out a news story -- and watch it get trumpeted by Limbaugh, Hannity and others -- saying that Bush is doing something to keep the deficit in check. Then watch them quote the Bushies phony math.

It's pathetic. What's worse, the story has thus far flown under the radio of our "liberal" (snicker, snicker) media.

3:46 PM  
Anonymous Anonymous said...

this will come out over time anyway---he is not running again so the fact it comes out next year rather than this wont be that big a deal. Especially since after the fact it is far harder to debate the subject (not that everyone doesnt spin the math their way anyway). I dont know why anyone thinks the deficit will drop anytime soon--nothing leads me to think that way. if the job market eventually takes off and we do not significantly raise taxes, then you may see an impact. Otherwise during a war, with serious issues ahead of us, the deficit will grow. Maybe its time to tell europe to chip in where their interests lie.

6:06 PM  
Anonymous Anonymous said...

what ever happened with wendy friessen

8:44 PM  
Anonymous Anonymous said...

I find it hard to get excited about this. Every politician since the beginning of time has spun budget numbers. I am not condoning this, but this is simply not even newsworthy. The entire system is based on "projections", so anybody can pick and choose which projection fits their ideological niche. I find the deficit numbers for President Bush about as real or accurate as the surplus numbers under Clinton. They are simply projections over time, using different baseline assumptions, nothing more, nothing less.

9:08 PM  
Anonymous Anonymous said...

The comparison to Clinton's budgets is pure hokum.

The point isn't that wars cost money. The point is that Bush won't include the cost of the war in his budget proposal. Why? Because it would make the deficit appear larger (and also, so that he isn't locked into a specific dollar amount, given the spiraling costs of the war).

Bush doesn't start with the actual 2004 deficit, but instead the initial (wrong) projection. Why? Because it artificially creates the image of deficit cutting. But this kind of convoluted math is meaningless in fighting the deficit. It's just spin.

Sometimes, conservatives post some interesting points of view on this site. I can see their point of view on the Rather case, for example.

But to defend Bush here is just swallowing the Kool-Aid. And to knock Clinton without providing factual support is nothing more than a cheap shot. It doesn't help the dialogue. It just shows off your blind loyalty to all things Republican.

10:31 PM  
Anonymous Anonymous said...

As a Bill Clinton proponent, and as a centrist disgruntled with politics overall, I would say I agree with both bloggers above.

There is no question that Bush and Co. are going to spin this to their favor. I do not believe it is even close to accurate to use projected numbers once actual numbers are available.

That said, Clinton surpluses, as reported widely, were based on forward projections that, as history has now shown, would never have come to fruition. Clinton left office with an actual surplus, which he should take some credit for (he had the help of strong economy, internet and telecom boom, and relative peace worldwide). However, the actual surplus was far less than the projected one reported all over the media.

Bush should not be completely faulted for the lack of surplus since the two front war, 9-11, corporate scandals, faltering economy after a large boom etc...would have put a serious dent in any surplus with any president. Yet, Bush has not curtailed spending as he should have on non military items. For that he should take blame. He also added to the deficit somewhat with his tax cuts although the long term effect, benefit or not, of his tax cuts are both debatable and difficult to determine. The jury is out on the Bush economy and this term will tell the story a bit better.

I wish all politicians and media would treat and cover these items fairly and honestly. But they will never do so which is sad. So the spin goes on for both sides. Liberals will believe what they want and conservatives what they want. These difficult issues take far more time to understand than the average person is willing to give. Most Americans have no idea what the deficit really means (other than the typical B-S that our children will bear the burden for our sins type of comments).

12:57 AM  
Anonymous Anonymous said...

I have to respectfully disagree.

Clinton created a "surplus" (the structural budget had no deficit, the surplus was because of the Social Security surplus), and following the economic line that had been created during the Clinton era, larger surpluses were projected.

What Bush is doing is pretending to cut the deficit via a mix of accounting tricks and purposeful ignorance of actual costs, such as the wars in Iraq and Afghanistan.

No one is suggesting Bush should have a surplus in 2005. No one is suggesting wars don't cost money.

The point is, why can't the Bush administration count all the costs, create an actual deficit, and then relate that number to the American people? Why do economists and other budget gurus have to piece together numbers in dribs and drabs (such as adding the 2005 cost of the wars, after the fact, or re-calculating the effect actual tax revenues have on the deficit, versus what many conclude are exceptionally rosy numbers from the Bush administration)?

With the Clinton-era numbers, there wasn't any deception. At worst, that administration was optimistic about the good times continuing to roll. By comparison, the Bush administration is playing hard and fast with the numbers, for the sake of political spin.

2:16 AM  
Anonymous Anonymous said...

Ahhh ... Clinton did not spin economic projections or budget numbers, but President Bush does. The virtue of the Dems and the inherent evil of the Republicans.

8:58 AM  
Anonymous Anonymous said...

Ahhh ... Clinton did not spin economic projections or budget numbers, but President Bush does. The virtue of the Dems and the inherent evil of the Republicans.


Let me clarify. Clinton was honestly projecting a surplus based on the trend in the latter years of his presidency.

But Bush is dishonestly projecting the 2005 budget deficit, and other than via accounting tricks, has done nothing to move toward his campaign promise of halving the deficit by 2009. It would be better for him to be honest about the deficit, and hope that the economy naturally grows out of half of the deficit by 2009.

10:19 AM  
Anonymous Anonymous said...

All the defenses to Bush's fiscal wizardry I see above seem to suggest it's okay if Bush uses deceptive accounting because other presidents before him have allegedly done it. Everyone else does it so it's okay.
It's all in the name of politics. La Di Da.
What absolute bullshit.
Let's hope non-partison analysts and objective journalist are able to tell the TRUTH without being buried under the kinds of partison bullshit defenses we read above and without being buried under a stinking heaping pile of Bush B.S. spin manure.

1:56 PM  
Anonymous Anonymous said...

Noone is suggesting spin is okay....just that it is nothing new and nothing surprising.

And yes, there is some truth to the fact that the spin matters less to me than the truth. Let me clarify: I care far more that there are real problems causing the deficit or future issues that will add to it than i do about whether Bush or anyone else spins about it.

Lets be realistic...you ask 100 non economists about the deficit and 90 of them will say "it's bad and needs to be fixed." 9 of them will say "deficit, huh?" One pseudo intellectual will pretend he understands it and spout out enough often false info to make 80 of the first 90 now say "deficit, huh?" As long as the deficit is this large, no amount of spin will have much affect on the public.

6:35 PM  
Anonymous Anonymous said...

Here's what I don't understand: The conservatives among us either want to say that Bush is no worse than Clinton, or now, that spin doesn't really matter.

Doesn't it bother you, my conservative brothers, that your president chooses to spin rather than tell the truth? And doesn't it suggest to you that if he willing to spin about something like the size of the budget deficit, that he might be willing to spin about larger issues, like Iraq and Homeland Security.

Could you imagine if Bush was your employee, and you asked him about some project he was working on, and he gave you a line that was clearly spin?

How woul you react:

1) You'd say it doesn't matter
2) You'd say that everyone who works for you spins the truth
3) You'd wonder whether Bush always spun things, and question when, if ever, he told the truth
4) You'd be pissed off

My answer would be some combination of three and four.

And folks, this president works for you. He's an elected official. We have (or at least we had) the power to hire or fire him. And in 2006, if we don't like the job he's doing, we can reject his party's platform by booting his fellow Republicans out of office (or, if we like the job he does, we can boot out the Democrats).

But anyone who says that they wouldn't mind an employee lying to them about something seemingly trivial is just not being honest.

10:27 PM  
Anonymous Anonymous said...

Nice try. Under your standard, every politician in this country would lose their job in a week. And that includes past politicians as well, CLinton included. (I loved Clinton but he was just a far better politician and a far better spinner than Bush). Its not necessarily correct but that is American politics. To compare American politics to a corporation is absurd as is the employee-employer scenario. (If you really want to stretch it to that, the better comparison is shareholders and a CEO. You want to see master spinning--work for a public company).

And you are exactly right--the way to voice your opposition is to vote a politician out of office. Bush won. So move on to congressional races and 2008....

9:48 PM  

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