Cutting the Deficit

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Ah, yes, the famous mid-session review showing we'll "cut the deficit in half in 5 years." The problem, as I note in the November issue, is that those projections (from an agency that answers to the White House, run by a former assistant to the president) assume current law, with sunsets built into the recent tax cuts. So we've got simultaneously the push to make those cuts permanent and the trumpeting of a deficit reduction projection that he's got to know is predicated on the assumption that this doesn't happen. The Congressional Budget Office runs projections with both assumptions, and the picture looks quite different. Though Bush is right that Kerry playing Mr. Fiscal Conservative isn't particularly plausible.

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  1. This is a hoot dudes. I wanta see some whipass.

  2. also, Bush might be projecting that further tax cuts make the economy stronger thus increasing tax revenues. But I really have no idea.

  3. Well, that might be his projection, but it doesn’t show up in the agency projections he’s using to back up his case. And while I agree that cuts promote growth in the long term, there’s a lag there; I wouldn’t expect it to show up in time to verify the “cut the deficit in half in five years” claim under any reasonable model.

  4. Although, considering what we know about Dubya, it’s even less plausible that he is playing Mr. Fiscal Conservative. It’s this kind of shameless assertion that worries me most about the current administration. To quote AC/DC, either he’s got the biggest balls of them all . . . or else he’s completely out to lunch.

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