Meanwhile, The Fiscal Year 2004 Budget from the White House is out, and it is delightfully funny. Favorite item so far comes from the explanation as to why this budget is only projecting out five years (p. 29):
[The Congressional Budget Office] also has noted problems with making five- and 10-year forecasts by stating, "Looking forward five or 10 years...increases the likelihood that budgetary decisions will be made on the basis of projections that later turn out to have been far wrong."
Given that this budget projects deficits for as far as they do project (instead of that legendary perpetual surplus that was touted in 2001), the previous few pages rationalising that the 2001 "tax relief law" didn't cause deficit spending appear disingenuous.
They get worse, of course, if you look at what is actually said (p. 27): "[I]f the tax cut of 2001 had never become law, the budgets for 2002 and 2003 would have been in deficit by $117 billion and $170 billion respectively."
So 2003 would have been -$170B. Instead (p. 28), "The Administration estimates that if the President's policies are enacted [but before the cost of any war] the federal government will run a deficit of some $307 billion this year."
I may be slow, or at least fuzzy-math impaired, but it looks as if they're saying that the tax cut is responsible for $137B worth of a $307B deficit. So 44.625% of the deficit is directly caused by a bill that was passed when some people (who should have known better then) believed there would be "surpluses as far as the eye could see."
Now that there are deficits as far as the eye can see, what is the appropriate reaction?
(p. 27) "By any measure, the projected deficit for 2004 must be judged as moderate. As a share of the economy (GDP), it would be smaller than in 12 of the last 20 years."
There aren't any specific numbers on the associated graph, but it appears that the exception years are 1995-2002. In other words, all but one of those twelve years to which we are supposed to compare the percentage were under Republican presidents. The fiscal conservatives of my ancestral party are rolling over in their graves right now.
More to come.