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Column: Deficit. What Deficit?

by P.M. Carpenter

Mr. Carpenter is a writer and historian and HNN columnist.

On the heels of the Gingrich Revolution ten years ago, President Bill Clinton's budget director warned that Republicans' demagogic "tax-cutting frenzy" would, if left unchecked by the White House, "throw fiscal discipline to the winds," be fed by "dishonest numbers" and lead to "a bigger budget deficit." Soon-to-be-Speaker Newt Gingrich pooh-poohed the warning, bizarrely citing the Reagan administration years that tripled the national debt as proof of the proposition that "there's no question" his party's fiscal policies "do work" in the pursuit of a balanced budget.

Five years later the Washington Post reported that Democrats were painting presidential candidate George W. Bush's economic plan as "far too expensive," one that "would plunge the government back to the days of deficit spending." Bush campaign spokesman Ari Fleischer responded with this devastating, detailed fiscal analysis: Democrats "have an ideological agenda and they torture the numbers to scream their liberal creed."

One year later, still on the campaign trail, Mr. Bush had taken to flashing before audiences four one-dollar bills as representations of the then-anticipated $4-trillion-plus federal surplus over the coming decade. Each dollar symbolized about a trillion, he was fond of saying, and under his economic plan one would go to protect Social Security, one would go to increased spending, one would revert to taxpayers -- and one would help pay down the national debt. What's to worry? Reaganomics merrymaking would bless our land once again, unencumbered by its 1980s fiscal disasters and its contrary experience of the 1990s.

Now comes the Congressional Budget Office's declaration of -- what else? -- fiscal disaster. After twenty years of warnings and hard evidence that contemporary conservative economics is firmly rooted in both the Twilight Zone and dishonesty, the CBO's September 7 report was merely one more confirmation. And what a confirmation it was.

Four-hundred-twenty-two billion dollars of record indebtedness this year, said the CBO, which the White House -- always the jokester -- hailed as good news. Well heck, it's less than the CBO projected in March and only $47 billion more than last year's record deficit. That was the administration's Twilight Zoneness of it all, leaving Vice President Dick Cheney to spearhead the dishonesty of it all.

Dishonesty, in that Cheney declared the smaller-than-CBO-projected deficit to be a "direct result of economic growth that came about as a result of the tax changes that the president put through." As the Center on Budget and Policy Priorities put it, this is "demonstrably incorrect." Or as I would put it, the Vice Prez lied, since while in office he's shown little intellectual slavishness to what is demonstrably true. Quoting the Center and contradicting Cheney, "Overall economic growth has been slightly slower than CBO expected when it issued its $477 billion deficit earlier this year," hence "higher-than-expected revenues cannot have resulted from faster growth." In reality, the effects of inflation and $30 billion less in unrealized taxpayer refunds chiefly accounted for the higher revenue.

And there was downright insulting dishonesty, in that Cheney and cohorts were hustling the knee-slapper that the deficit was actually falling. In listening to the V.P., one would never know the deficit shot up by nearly $50 billion to a record level. The White House primed the joke's punch line early in the year by vastly exaggerating its own deficit projection, just to claim victory when the lower, realistic numbers came in. As I wrote last February, "Quite aside from the real and extensive problems inherent in crushing national debt, this administration has added another problematic dimension: No one can, or should, take seriously anything it says about budgets…. [W]e're likely witnessing a White House scam of deliberately overestimating this year's deficit for … political reasons." I was trying to play nice by adding the adverb, "likely."

If you can't get enough of deficit spending, you're in luck, for the CBO also forecasts annual deficits averaging $440 billion over the next ten years - and then the real trouble starts, assuming Bush permanently cements his tax cuts. But let us not even think about that. It tempts downer-overload.

Does the White House have its head in the sand, hoping against hope that deficit woes will somehow alleviate? Of course not. It well knows the adversity its economic approach has wrought in the past and of the fiscal train wreck that lies ahead. It just hopes you don't.

Mr. Carpenter's column is published weekly by History News Network and buzzflash.com.