Bush's Budget Deficit Disorder (DNC Research)

[MaineDem]

For Immediate Release
July 11, 2006
Contact: Stacie Paxton/Mark Paustenbach - 202-863-8148

Bush's Budget Deficit Disorder

Washington, DC - The Bush PR campaign is at it again, they are trying to spin
the "good news" that the Administration that inherited record surpluses has
turned them into record deficits. And, again, the Bush Administration used
misleading and inflated deficit estimates to obscure its horrible fiscal
policies. Its original, intentionally gloomy deficit estimate for the 2006
fiscal year was $423 billion. This misleading rhetoric attempts to obscure the
fact that the White House's reckless fiscal policies, aided and abetted by the
rubber stamp Republican Congress, have produced an economy that is not working
for America's working families.

"Here they go again cherry-picking the facts to hide the truth from the
American people," said Democratic National Committee Press Secretary Stacie
Paxton. "The simple fact is that we simply cannot trust the Bush Administration
with our tax dollars, nor can we trust them to tell the truth about how much of
it they are spending.

"Only the Bush Administration and the rubber stamp Republican Congress would
think that an economy with the fourth largest deficit in history, millions of
hard working Americans facing stagnating wages while their costs skyrocket with
no relief in sight, is something to celebrate. Then again, the Bush economic
boom was not designed to benefit hard working Americans. In keeping with
Republican policies, it was designed to help the big corporations, once again
putting what's good for them ahead of what's good for the American people.
Democrats offer a new direction for America that includes sound fiscal policies
and an economy that works America's families."

AMERICA'S WORKING FAMILIES GETTING BUSHWHACKED

Bush's Phantom Deficit Reductions Due To Exploding Profits For Corporations And
The Wealthy, Which Have Increased Tax Receipts. "The rising tide in tax
payments has been building for several months...The main reason is a big spike
in corporate tax receipts, which have nearly tripled since 2003, as well as
what appears to be a big rise in individual taxes on stock market profits and
executive bonuses."

Long-Term Fiscal Outlook Still "Bleak." "...the favorable news about the money
rolling into the Treasury stems largely from shifts in the economy, including
fatter corporate profits, executive bonuses and stock market gains, that
reflect growing inequality, the administration's critics contend. And even the
White House acknowledges that in the long run, the nation's fiscal outlook
remains bleak."
Wages For America's Working Families Have Stagnated Under Bush. Middle-class
families are working harder and earning less today than they were at the start
of the Bush Administration. Average household income has declined each year
during the Bush presidency. Median weekly earnings have fallen 0.9 percent
since 2001 compared with 7.3 percent growth in the last five years of the
Clinton Administration.

Poll: Majority Of Americans Disapprove Of Bush's Economic Policies. "More than
six in 10 Americans say the country is on the wrong track, according to a new
Bloomberg/Los Angeles Times poll. More than half disapprove of Bush's handling
of the economy, and 36 percent strongly disapprove. Almost half, 48 percent,
say his policies have made the economy worse than it was when he became
president; 19 percent say it's better."

BUSH'S BUDGET TRICKERY

"Tax relief is central to my plan to encourage economic growth, and we can
proceed with tax relief without fear of budget deficits, even if the economy
softens."

"Our budget will run a deficit that will be small and short-term." Bush, 2002 State of the Union]

2001: Bush Deliberately Underestimated Future Deficits. In 2001, President Bush
predicted massive budget surpluses over the following four years, in order to
make the case that America could afford his tax cut plan. Instead, each of
those years Bush's policies led to huge deficits. In 2001, Bush predicted a
$231 billion surplus in 2002, $246 billion surplus in 2003, $268 billion
surplus in 2004, and $273 billion surplus in 2005. Office of Management and Budget, 1/01; Congressional Budget Office, 3/04,
9/04]

2002: Bush Continued To Underestimate Deficits. President Bush has said that
his optimism about budget deficits was based on the assumption that the economy
would not hit a "trifecta" of trouble: recession, national emergency and war.
But in February 2002 - after the recession was declared, the terrorist attacks
had occurred, and war had begun in Afghanistan - his Administration continued
to have upbeat predictions. Although it forecast a $106 billion deficit in 2002
(reality: $158 billion), it saw the deficit shrinking to $80 billion in 2003,
$14 billion in 2004, and becoming a surplus of $61 billion in 2005. Post, 2/24/04; Office of Management and Budget, 1/02; Congressional Budget
Office, 3/04, 9/04]

Bush Administration's 2002 Deficit Projections Were Worst In 21 Years. Figures
released by the White House show that Bush's 2002 underestimate of the deficit
was the largest miscalculation in at least 21 years. 2/24/04]
2003: Bush Tried A Different Tack: Overestimating Deficits. In the July 2003
OMB budget forecast, President Bush projected a considerably larger 2003
deficit than any other analysts were projecting at that time. When the actual
deficit for 2003 turned out to be $81 billion lower than Bush's July estimate,
the White House trumpeted the difference as good economic news and evidence
that Bush's policies were working. Yet, most of the difference was unrelated to
the economy: two-thirds of the $81 billion difference occurred because spending
in 2003 was lower than Bush's OMB predicted in July. Policy Priorities, 2/2/04, 2/3/04; Office of Management and Budget, 7/03]

2004: Bush Continued To Overestimate The Deficit. In February 2004, Bush
projected a 2004 deficit of $521 billion, whereas the CBO projected a deficit
of $477 billion - $44 billion less. Then, in July 2004, the White House revised
the number down from the unrealistic $521 billion to $445 billion; in September
2004 the CBO issued more realistic projections of $422 billion. The final
deficit number for 2004 was $412 billion. 2/04, 7/30/04; New York Times, 7/31/04; Washington Post, 7/31/04; CBO, The
Budget And Economic Outlook: An Update, 9/04; Los Angeles Times, 7/11/06]

2004, 2005, 2006: For The Last Three Years, Bush Has Overestimated The Deficit.
"This will be the third year in a row that the administration put forth
relatively gloomy deficit forecasts early on, only to announce months later
that things had turned out better than expected. To some skeptics, it's
beginning to look like an economic version of the old 'expectations' game."


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