Half of budget formula seems to be working
July 14, 2005
Talk about a glass half full. A White House budget report this week predicts the federal deficit will be only about $333 billion by the end of the year.
“These numbers indicate that we’re going to cut the deficit in half faster than the year 2009 – so long as Congress holds the line on spending,” said President Bush.
Well, that pretty much sums up the problem here.
Bush seems satisfied with a deficit that remains stratospheric. And his optimism depends on Congress suddenly finding the gumption to refrain from spending not only every penny it has but billions it doesn’t have.
Neither can provide any solace to American taxpayers who were hoping the Republican hold on executive and legislative branches of the federal government would mean a new sense of restraint on runaway spending.
The half-full portion of the glass is the evidence that Bush’s 2001 tax cuts are having the desired effect on the economy, fueling overall growth and a 15 percent higher revenue level for the federal treasury. Who knows how much that growth might be if spending were under control?
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The half-empty portion of the glass is how the deficit picture continues to be painted in a false light. It would be $173 billion higher if Social Security taxes were being figured in the right column. And somehow the war in Iraq is being fought with money being kept off the books entirely.
Budget defenders like to point out that that the deficits are a lower percentage of the gross national product than they were during periods of the mid-1980s and early 1990s.
Taxpayers may look at it a little differently. They were paying 30 percent of the income in taxes in 1990, reached a high of 33 percent in 2000 and this year are back down to 29.1 percent, according to the American Tax Foundation.
So it’s better, but still absurdly high.
Bush and Congress have the formula half right. Dam the flood of government spending and they’ll be able to fill the glass to the rim.