Hot air on the ballooning deficit


Farhad Manjoo
September 8, 2004 1:42AM (UTC)

The Bush White House has long exhibited a penchant for Orwellian rhetoric, but its perversely cheerful reaction to recent gloomy economic news is remarkable even by its own standards. Last week, when the Labor Department reported that only 144,000 jobs were created in August -- far fewer than the 300,000 that the White House had earlier predicted -- administration officials appeared quite pleased by the news, concluding from the number that the economy is now moving "in the right direction." And they were happy once again today, when the nonpartisan Congressional Budget Office announced that the 2004 federal budget will hit a record $422 billion in deficits. Because the CBO's estimate is $56 billion lower than the prediction the agency made in March, a Bush campaign spokesman told reporters that the new data is "a sign of the economic growth that is a result of President Bush's leadership on tax relief."

"Only George W. Bush could celebrate over a record budget deficit of $422 billion," responded John Kerry in a statement released today. Indeed, looking at the sizable report [PDF], it's difficult to see what the White House is so enthusiastic about. The CBO notes, for instance, that "although the deficit for fiscal year 2004 is anticipated to be $56 billion lower" than its earlier estimate, "the deficits projected for 2006 and beyond have grown." What this means is that Bush's oft-stated goal of cutting the deficit by half in five years' time now looks all but impossible: According to the CBO, the deficit in fiscal year 2009 will stand at $312 billion, or about 2.1 percent of that year's economy.

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And as Richard Kogan and David Kamin of the Center on Budget and Policy Priorities point out, the CBO's longterm numbers are probably too optimistic, as they don't take into account continued large defense outlays nor the Bush administration's goal of making its tax cuts permanent. With those proposals added to the tally, Kogan and Kamin note, "projected deficits will not fall below $335 billion in any year, will average $440 billion per year over the next decade, and will total approximately $4.4 trillion over the ten-year period."


Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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