in the pursuit of tax cuts is no vice. That,
in the end, will be the only way to defend
George W. Bush's deceptions.
Let's remember the way the debate ran during
the spring. Back in May, The New Republic's
cover showed a picture of Mr. Bush, with the
headline "He's Lying." Inside were two articles
about the tax cut. One, by Jonathan Chait,
showed that -- contrary to administration
claims -- the tax cut would mainly go to the
richest few percent of the population. The
other was an excerpt from my own book "Fuzzy
Math," refuting the administration's claims
that it could cut taxes, increase military
spending, provide prescription drug coverage
and still avoid dipping into the Social Security
The New Republic cover caused much tut-tutting;
the magazine's editors were accused of hyperbole,
of rabble-rousing. But the headline was a
simple statement of fact. Mr. Bush was lying.
It was obvious from the start that the administration's
numbers didn't add up.
And in case you were wondering, the administration
is still lying. I could explain at length
how the Office of Management and Budget has
cooked the books so that it can still claim
a surplus outside of Social Security over
the next two years. But here's an easy way
to see that the numbers are bogus: O.M.B.
claims that the budget will show a surplus
of $1 billion this year, and another $1 billion
next year. Ask yourself how likely it is that
revenues and outlays in a $2 trillion budget
would line up that exactly. Then ask yourself
how likely it is that they would line up that
exactly two years in a row. The O.M.B. numbers
are the result of desperate backing and filling
-- shift some revenue from this year to next
year, then move some of it back, then change
accounting rules that have been in place for
65 years, then bump up the estimate of economic
growth -- all so that the administration can
pretend that it is keeping its promise.
Congressional Budget Office, which does honest
work but under certain constraints -- more
on that in a minute -- is supposed to release
its own estimate today, but the main results
have already been leaked. They show a deficit
outside Social Security this year, a tiny
surplus next year, then a return to deficit
in 2003 and 2004. And these numbers, read
properly, flatly refute two of the arguments
you'll hear over the next few days.
First, the administration will tell you that
the return to deficits is the result of the
economic slowdown. Not so: the C.B.O., like
the administration, assumes that the economy
will recover next year, but projects that
we will be in deficit through 2004. Why? Because
the tax cut grows over time, and the revenue
lost because of that growing tax cut is more
than the revenue gained from economic recovery.
Why has the prospect of surpluses been replaced
by the prospect of deficits, even after the
economy recovers? To coin a phrase: It's the
tax cut, stupid.
Second, the administration will try to blame
big spenders in Congress for the deficits.
But who are these big spenders? The only major
new spending items in the C.B.O. projection
are for defense and education -- both in response
to administration initiatives. And it's the
administration, not the Democrats, that has
described the defense increase as a mere "down
payment" on much larger future sums.
future defense increases aren't in the C.B.O.
projection, because the rules under which
C.B.O. operates force it to project the budget
as if current policy will remain unchanged.
So the C.B.O. projection leaves out the budget-busters
it knows are out there, such as Donald Rumsfeld's
next installment and the cost of fixing the
alternative minimum tax. Put those items in,
and the picture is clear: the surplus is gone,
and we won't see it again as long as the tax
cut goes through as scheduled.
I'll turn in future columns to the reasons
why this year's deficit is not a bad thing,
but those future deficits -- which will be
much larger than the C.B.O. projects -- are
very bad things indeed.
But the important point for now involves honor
and credibility. Mr. Bush promised not to
dip into the Social Security surplus; he has
broken that promise. Critics told you that
would happen; they have been completely vindicated.
Mr. Bush told you it wouldn't; he lied.
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