Bush's Budget-Victory Smoke and Mirrors

[Bob Geiger]

How shameless is George W. Bush and his crew in the White House? How about coming in with the fourth-largest yearly budget deficit in United States history and announcing that it's a major victory? (Based, of course, on inflated deficit estimates previously given that guaranteed the actual number would look better.)

Bush announced today that the mid-year budget review shows that "this economy is growing, federal taxes are rising <sic>, and we're cutting the federal deficit faster than we expected" and that the 2006 budget deficit will actually come in at a whopping $296 billion, versus the staggering $423 billion they had floated as a fake estimate.

I should have thought to try this logic with my wife when I came back from YearlyKos in Las Vegas last month. "Honey, I have good news. I only lost $2,000 in Vegas instead of the $10,000 I estimated I would lose."

That wouldn’t fly in my house any more than today's exercise in deceit should be accepted by the American people.

"This good news is no accident," said Bush to an adoring crowd of applauding Republicans, "It's the result of the hard work of the American people and sound policies in Washington, D.C. That's what happens when you implement pro-growth economic policies."

I'm with the New York Times who called the Bush budget charade "Another Mission Accomplished" moment and said in its lead editorial today that "this is proof, if anyone still needs it, that this administration is desperate for something to boast about."

"On Mr. Bush’s watch, triple-digit budget surpluses have turned into annual triple-digit budget deficits. There’s no information in the midsession report to alter that utterly dispiriting fact. Yes, the report is expected to project that this year’s deficit will be somewhat less gargantuan than last year’s — probably somewhere between $280 billion and $300 billion, versus a $318 billion shortfall in 2005. That’s not much to crow about.

"But Mr. Bush is likely to gloat, anyway. Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results can be spun to look as if they’re worth cheering."

And what happened in Iraq today while King George was celebrating his self-fulfilling victory? Let's see, we had the usual array of car bombs, kidnappings, suicide attacks -- by bombers wearing explosive-laden vests -- beheadings, shootings, mortar attacks and an ambush of a bus carrying Shiite mourners from a funeral.

Party on, Mr. Bush. Party on.

You can reach Bob Geiger at [e-mail].

[neoblues]

1. Lies and Cleverly Confusing Lies.

Their economic policies are no more successful than their missile defense shield, and both are going to cost us our arms and legs.

[brg5001]

12. I guess 1% interest rates had nothing to do with higher tax receipts?

Looks like Wall Street veteran (Treasury Secretary) Henry M. Paulson, Jr. is already hard at work playing "beat the number."

Why is it that no one in Wingnutland ever mentions that Greenspan lowered interest rates from 6.5% (on election day 2000) to just under 1% for an entire year, from July 2003 through June 2004? And he took his sweet time raising them. Any average monkey can juice the economy with hundreds of billions in credit card spending and four years' worth of the lowest short-term interest rates in 50 years. Free money! Wooo hooo!

I'm going to heave the next time some Faux News bubblehead gushes, "Tax cuts raised revenue and cut the defcit". No, EASY MONEY and outrageous deficits did the trick and now, it's payback time, baby.

The unsustainable housing bubble peaked last year, generating fleetingly high tax receipts. Now, the hangover is coming on strong as the "housing ATM" dries up. Meanwhile, inflation is skyrocketing on a diet of easy money, oil-fed trade deficits, and a tsunami of imported goods and outsourced labor.

Of course, wingnuts like to point to Sept 11 and the bullshit "War on Terror" as necessitating the tax cuts, but they forget that just after the election of 2000, the Fed began undertaking 16 bloody interest rate cuts and we ended up with the lowest short-term rates in 50 years. Congress could have RAISED taxes and GDP would have gone up, for crying out loud.

That always seems to be missing from the debate, and it's one of our best retorts to the supply-side idiocy. The Fed cranked up the printing presses and Greenspan foolishly advocated the ridiculous tax cuts. Screw the dollar. Screw fiscal and monetary discipline.

Also: The tax cuts were supposed to pay for themselves, not merely come within $300 billion of paying for themselves. Someone needs to remind the Republicans that their supply-side god, the appropriately-named Arthur Laffer, believed that tax cuts only "work" to ultimately increase tax revenues if you don't give a hoot about the deficit, if marginal rates are extraordinarily high and the economy has been suffering from many years of anemic growth. Neither of the latter two factors were in place during the Bush administration. On the contrary, marginal rates were historically low and we were undergoing one of the shallowest recessions in history. In other words, the economy was at the point where cutting taxes would reduce tax revenues, and that's exactly what happened until the free Fed money kicked in.

Furthermore, the notion that tax cuts can ever "pay for themselves" is laughable, particularly without any kind of spending discipline whatsoever. That leftist, anti-American pinko rag Business Week has pointed out that even under the most favorable circumstances, tax cuts blow a hole in the budget for many years.

Yes, the hard work of the American people will be needed to cope with our currency in the toilet, reduced health services, much higher student and home loan interest rates and yes, future tax increases to counteract this drunken monkey's spending spree. Party on, indeed.

[newyawker99]

14. Hi brg5001!!

Welcome to DU!! :toast:

[KKKarl is an idiot]

18. Good job George

You are so good at reducing the deficit. We are in awe of you tenacity in sticking to you tax cuts so that those rich folk can invest more money. I see your point they invest their money in China. We can buy Chinese goods at cheaper prices thereby increasing tax revenues because people are spending more (on credit). People get more jobs because of more credit being used & they pay income tax. Revenues increase. So this year we only have to borrow 296 billion from the Chinese instead of 423 billion. So they can keep more of the money we sent them to send us more goods that we can buy on credit & therefore increase tax revenues from more people paying income tax. This is called "the circle of life" according to GW Bush.

[brg5001]

19. Palm Beach Post editors derail W's dorky deficit dogma

EXECUTIVE SUMMARY FOR BUSY DUers: Deficit crowfest just another premature victory celebration by babbling, bumbling, bellicose right-wing supply-side suckers.

"Sobering Deficit News"

Palm Beach Post Editorial
Thursday, July 13, 2006

President Bush and Republican leaders in Congress didn't invite the Concord Coalition to their deficit-reduction gala on Tuesday because reality wasn't on the guest list.

From the White House came a predictable whoop of triumph. The deficit for the fiscal year that ends Sept. 30 will be only $296 billion, not the predicted $423 billion. That would be just 2.3 percent of the economy. Tax revenues are way up from last year, and above projections. The president is on track to cut the deficit in half within five years, as he promised to do. Tax cuts made it all happen.

Enter party-crasher Robert L. Bixby, director of the Concord Coalition, to remind Americans that $296 billion would be a drop of just $22 billion from last year, despite the growing economy. Also, $296 billion still would be the fourth-largest deficit on record, with that 2.3 percent of the economy still being comparatively high. And the national debt keeps rising. Mr. Bixby notes that "interest on the debt has become the fastest-growing category of federal spending."

Is there more sobering news? There is. The Bush administration, which last winter provided the conveniently high-balled $423 billion projection, doesn't include in its budget forecasts beyond 2007 money for the war in Iraq and lost revenue from needed reform of the Alternative Minimum Tax. As for all that added money coming into the treasury, Mr. Bixby points out that only now are tax revenues getting back to the level they were in 2001 - 18.3 percent of the economy. Under Mr. Bush, however, spending has gone from 18.4 percent of the economy to 20.6 percent.

Concord Policy Director Ed Lorenzen offers other statistics that dispel the tax-cuts-as-savior myth. During the five years after Congress raised taxes in 1993, annual economic growth was nearly 25 percent higher than during the five years after the first Bush tax cuts of 2001. Revenue growth after the 1993 tax increases was more than double what it has been since the 2001 tax cuts.

In fact, the borrow-as-you-go policies of Mr. Bush and the GOP Congress have made the U.S. dependent as never before on foreign government lenders. That dependency carries more risk than our reliance on foreign oil. So, what does Mr. Bush propose? More rich-skewed tax cuts that will widen the income gap. That's no reason to party.

http://www.palmbeachpost.com/opinion/content/opinion/epaper/2006/07/13/a18a_deficit_edit_0713.html

[flying_wahini]

2. It reminds me of the response after bouncing several checks

the dumb guy said, "What do you mean I have no money? I still
have checks in the checkbook!"
He just flat doesn't get it.

[Rude Horner]

3. And once again, he uses the phrase...

It's the result of the "hard work of the American people....."

Ever notice how often he uses that phrase? I think they figure if they throw out that compliment to us, we won't complain because how can you complain to a guy who's giving you a compliment? :puke:

[Toots]

4. and what was that deficit figure of Clinton's last year again, I forget???

Is America really this stupid?

[Lasher]

7. $236 Billion Surplus

Before The Decider's train wreck came along, the biggest deficit in history was $290.4B, produced in 1992 by Poppy. Clinton delivered a $236B surplus in 2000, which was a $526B turnaround.

[johncoby2]

5. Yes! But I have more money in my pockets now!

And i am giving it to my gas company.

I dont know about you guys, but things are pretty damn tight in my house. No vacations this year. My kids camps are put on my credit cards.

I have absolutely no spending money what so ever.

These damn tax cuts are killing me.

[kentuck]

6. This is true...

"Based, of course, on inflated deficit estimates previously given that guaranteed the actual number would look better.)"

In other words, a lie.

[young_at_heart]

8. We're all so proud of him

He truly has accomplished a major victory..... he deserves lavish praise for his role in reducing the deficit. Of course, all the folks forced to stay on the disgraceful minimum wage are extra proud!

[NoAmericanTaliban]

9. His dad said it best - Voodoo Economics!!!

They want to get rid of the estate tax and have replaced it with a birth tax. Unfortunately, a lot of folks are buying this latest lie about the budget. Classic case of falling in a pile of shit and coming out smelling like roses. Rove isn't called turd blossom for nothing.

Heard on CNN this morning that what employees pay for health insurnace will go up by double didgits & yesterday average summer gas price was up by 20 cents.

[BrewAz]

10. More talking points....

See..... the economy is growing and the Shrub is on his way to making good on his pledge to cut the deficit in half.....WOW, nothing but more "talking points" for the babbling wingnut talking heads. Just what they need.

The NYT had a solid editorial...but I am still waiting for the MSM to have some investigative effort focused on the REAL economy for the masses: job loss, sky rocketing costs, real income down, 3 jobs to make ends meet, no health care coverage for the family, no vacations, no new clothes for the kids.....it just goes on.

Can we actually stop this in 2006 with a new congress?

BrewAz

[Up2Late]

11. Exactly, and maybe it's time to look back to February 2006 and see...

...what was being said at the time about this sham "Projected Budget." Notice this from the Washington Post Analysis below, "...Those factors led Goldman Sachs economists to tell clients yesterday that the deficit forecasts are "unrealistic...."

Bush Budget Plan a Headache for Congress

Bush Sends GOP Allies in Congress a Budget Filled With Political Land Mines, Difficult Choices

By ANDREW TAYLOR

WASHINGTON Feb 6, 2006 (AP)— President Bush sent his GOP allies in Congress an austere budget for next year that is filled with political land mines and flush with difficult choices.

The document unveiled Monday clamps down on domestic programs favored by lawmakers and calls for politically perilous curbs to Medicare that promise to bog down in a Congress already poisoned by election-year politics.

"It's a heavy lift," said Senate Budget Committee Chairman Judd Gregg, R-N.H. "There's no question it's going to be a challenge."

Despite the sacrifices called for in education, Amtrak, community development and local law enforcement grants, health research, and many other programs frozen or cut under his plan, Bush's $2.77 trillion blueprint forecasts a record $423 billion deficit for the current year and improves upon that figure in 2007 largely by low-balling cost estimates for the war in Iraq.

Bush gives a generous 6.9 percent budget increase to the Pentagon which would receive a record $439 billion before accounting for the wars in Iraq and Afghanistan and wants Congress to pass a $3 billion or 14 percent increase in foreign aid.

(more at link) <http://abcnews.go.com/Politics/wireStory?id=1587765>

<http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=2090845>

Analysis

Budget Plan Assumes Too Much, Demands Too Little

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, February 7, 2006; Page A10

President Bush's budget blueprint would bring the federal government's budget deficit under control by decade's end. But to do that without raising taxes, the White House would need a sweeping tax reform that it has avoided proposing and a swift end to the war in Iraq.

The budget plan for fiscal 2007 underscores what budget analysts of all political stripes have been saying for years: The goals of balancing the budget, waging a global fight against terrorism and making Bush's first-term tax cuts permanent may be fundamentally at odds.

Under the budget plan, the deficit would jump from $318 billion last year to $423 billion in 2006, then slide back down to $183 billion in 2010. In 2011, the last year of the White House's projection, the deficit would again begin to rise, to $205 billion, reflecting the cost of extending Bush's tax cuts beyond their 2010 expiration date and enacting a proposed Social Security restructuring that would cost $57 billion in that year alone. But even getting there requires some heroic assumptions.

The president's budget acknowledges the cost of Bush's call to make his tax cuts permanent -- $1.35 trillion over the next decade and nearly $120 billion in 2011 alone. But beyond 2007, the budget assumes no military expenditures in Iraq or Afghanistan and no effort to address the unintended effects of the alternative minimum tax, a parallel income tax system that was designed to hit the rich but has instead increasingly pinched the middle class. It also assumes Congress will cut domestic spending every year after 2007.

Those factors led Goldman Sachs economists to tell clients yesterday that the deficit forecasts are "unrealistic."

(more at link) <http://www.washingtonpost.com/wp-dyn/content/article/2006/02/06/AR2006020601424.html>

Here's more links too:

<http://news.bbc.co.uk/2/hi/business/4686684.stm>

<http://www.cnn.com/2006/POLITICS/02/08/bush.budget/index.html>

<http://www.bloomberg.com/apps/news?pid=10000087&sid=ab2mtBjufzg8&refer=top_world_news>

[primative1]

13. What About The War ,,,,

I have wondered for some time why BushCo has so avidly funded the war "OFF BUDGET". I mean, we know its off budget, right?
Guess not. Now BushCo crows about cutting the deficit when in reality when you ad in all the money he has flushed in Iraq-Afghanastan (someone should remember to add that in right?, media? Hello?) the deficit is still spiraling out of control.

[NewJeffCT]

16. Isn't the Katrina relief "off budget" too?

At least I think it is. But, I could be wrong.

[norml]

15. Bush Celebrates Fourth Largest Deficit In History

Bush Celebrates Fourth Largest Deficit In History



Today, the Office of Management Budget projected a $296 billion federal deficit for fiscal year 2006. Bush held a press conference arguing that this is a vindication of his economic policies.

Actually, it would be the fourth largest deficit of all time. Here’s the top five:

1. 2004 (George W. Bush) $413 billion
2. 2003 (George W. Bush) $378 billion
3. 2005 (George W. Bush) $318 billion
4. 2006 (George W. Bush) $296 billion (projected)
5. 1992 (George H. W. Bush) $290 billion

When President Bush came into office, he inherited a surplus of $284 Billion. At that time, the Bush administration predicted a $516 billion surplus for 2006.

The fact that Bush now considers a $296 billion deficit an occasion to celebrate shows how far we’ve fallen.

Filed under: Budget
Posted by Judd July 11, 2006 10:10 am

Permalink | Comment (289)


snip


http://thinkprogress.org/2006/07/11/fourth-largest-deficit/

[trogdor]

20. This is indeed as good as it gets.

Think about it. The reason the deficit was so big in '03 and '04 was because the economy really sucked. The economy is somewhat better now, about as good as it will ever be as long as Bush is President, and the lower deficit numbers reflect that.

We're spending $300 billion a year that we don't have and blowing it on bombs and bullets. The Army is hiring just about any warm body to help burn this extra $300 billion, but not only are they not getting them (at least not the sort of quality recruit they'd rather get), we're not anywhere close to full employment. If the Bush administration wasn't crammed full of incompetent morons, this sort of pump-priming would have created a boom rivaling the one from the 90's, not the 'ehh' moderate growth we've been experiencing the past couple of years.

[AllegroRondo]

17. Great cartoon on the subject