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Two Americas, One Deficit
by E. J. Dionne Jr.
Washington Post
February 6, 2004

Perhaps the Bush administration is more clever than we know. Maybe it figures that if it sends up an outlandishly deceptive budget, Americans will be distracted enough to stop asking questions about what happened to those weapons of mass destruction in Iraq.

This is an administration that says whatever is necessary to get what it wants. When its claims turn out not to add up, the White House assumes people will just forget what it said earlier and move on. But voters are neither stupid nor indifferent to facts. That is why President Bush has been dropping in the polls. Are Americans who once believed him wondering if they have been played for fools?

The president's new budget, with its $521 billion deficit, is an astonishing example of how, for these guys, everything is political. It is a budget designed to mislead, deny, deflect and hide.

It misleadingly claims that the government is on a path to cut the deficit in half in five years. It denies that the president's tax program is a big part of the fiscal mess we're in. It deflects election-year criticism by shoving the most difficult budget cuts until after Nov. 2. It hides the lengths to which the administration will go to protect its tax cuts for the wealthy.

The bland language of the budget conceals the flimflam. The president's answer to the medical crisis is a health care tax credit to help the uninsured buy insurance. It's a dubious solution. But if Bush thought this was a serious idea, wouldn't he account for its effect on the deficit?

On Page 43 of the budget comes the claim that the president's plan "includes contingent offsets that would cover the estimated increases in mandatory spending that would result from this proposal."

From those words, you would think that Bush has specific cuts in mind to pay for the new benefit. But no, the budget simply promises that "the administration will work with the Congress to offset this additional spending." No specifics. No nothing.

Now turn to Page 374. You discover this health care proposal would cost $65 billion between 2005 and 2014. Three lines down, there is a minus $65 billion for a "contingent offset for refundable portion of the health care tax credit." Whoosh! Throw in that minus sign and the cost disappears, without a single hard choice having been made. Either Bush wants to cut stuff he doesn't want to own up to, or he doesn't care about his promise to cut the deficit, or he doesn't care about this proposal.

Bush is eager to tell people how much they'd save if his tax program were made permanent. But there is the little problem of the alternative minimum tax (AMT). Designed to prevent rich people from using loopholes to pay no taxes, its provisions will increasingly have the effect of raising taxes on significant numbers in the middle class.

If the AMT stays as it is, more than 30 million people will have at least part of their Bush tax cut canceled by 2009. The administration says it wants to fix the AMT, but its budget figures assume it won't. So the administration's claims about falling deficits assume revenue it promises to eliminate later. And these guys pride themselves on honesty?

Another amazing little proposal: The administration says it wants to restore pay-as-you-go rules to bring down the deficit. The old rules said that if Congress increased spending on an entitlement program such as Medicare, it had to cut another entitlement or raise taxes by the same amount. Similarly, new tax cuts had to be offset by entitlement cuts or tax increases elsewhere.

Bush's rule would exempt tax cuts from the pay-as-you-go principle, meaning no limits on more tax cuts for the rich or loopholes for big companies. But if Congress wanted to increase a benefit for Medicare recipients or disabled veterans, it would have to pay for it with cuts in other entitlements. It couldn't cover the cost by eliminating some egregious tax shelter. "This is class warfare enshrined in law," says Robert Greenstein, the executive director of the Center on Budget and Policy Priorities.

Imagine you are the Special Interest Corp. of America and wanted a government subsidy. If you hired a lobbyist to get the money through a tax break, the Bush rule would not stop you -- even if your handout increased the debt burden on the next generation.

Democratic presidential candidate John Edwards says we have two governments, one for the privileged and one for the rest of us. You wonder if Bush realizes how much he is helping Edwards make his case.

Posted: February 9, 2004


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