White House Projects Deficit Near $300 Billion
RENEE MONTAGNE, host:
The White House announced yesterday that this year's federal deficit will be below $300 billion. That's more than $125 billion lower than predicted, and with that, the Washington spin machines got cranking.
President Bush claimed credit. Democrats accused the White House of fudging their numbers. NPR White House Correspondent David Greene reports.
DAVID GREENE reporting:
At every opportunity, President Bush likes to talk about his pledge to cut the annual budget deficit in half. But half of what?
Spokesman Tony Snow says the President is using a number from a few years ago as his baseline.
Mr. TONY SNOW (White House Press Secretary): That was back in February of 2004, when there was a projected $521 billion deficit, and so we're looking at the halfway point of that.
GREENE: Notice, Snow said projected $521 billion deficit. The actual deficit for 2004 was more than $100 billion lower. Still, President Bush came in to the East Room yesterday determined to announce that he's approaching his goal.
President GEORGE W. BUSH: Here's some hard numbers. Our original projection for this year's budget deficit was $423 billion. That was our projection; that's what we thought was going to happen. That's what we sent up to the Congress, here's what we think. Today's report from OMB tells us that this year's deficit will actually in at about $296 billion.
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GREENE: The President kept piling on the apparent good news.
President BUSH: I said we could cut the federal deficit in half by 2008 or 2009. We're now a full year ahead of schedule.
GREENE: Eugene Steuerle, who worked in the Treasury Department under President Ronald Reagan and is now a senior fellow at The Urban Institute in Washington, said Mr. Bush was probably doing a bit too much celebrating.
Mr. EUGENE STEUERLE (Senior Fellow, Urban Institute): There's the data, and then there's the spin of the data. It's very hard in any one-year change in the economy to make very broad claims one way or the other.
GREENE: STEUERLE said, yes, higher than expected tax revenues are bringing down the deficit this year. But to focus too much on that, he said, may be to ignore larger challenges, like paying for costly entitlement programs and reforming the tax code.
Mr. STEUERLE: It's nice that receipts are up a little bit right now; that's going to give us a tiny bit of a reprieve. Hopefully, it's not a reprieve that's just going to forestall the day when we deal with our much more serious problems.
GREENE: And he didn't blame just the president. Both parties, he said, have year after year ducked the nation's biggest economic challenges.
Democrats yesterday went into hyper drive after Mr. Bush's speech. It took 20 minutes for Democrat Senator John Kerry's office to fire off a statement to reporters. The president, Kerry said, shouldn't be happy simply because record deficits are not quite as high as his own budget office had guessed.
Democratic Senator Kent Conrad, of North Dakota, took his criticism even further.
Senator KENT CONRAD (Democrat, North Dakota): You know, earlier this year, when they came up with this deficit forecast, I said at the time in this very setting, I don't believe these deficit forecasts. I think they overestimated the deficit on the front end to claim success later on in the year. And guess what? That's exactly what they're doing now.
GREENE: White House Spokesman Tony Snow dismissed as insane the idea that the White House would adjust its estimate in this way. But such accusations are nothing new to Washington. Back before he was president, Mr. Bush had this to say about his presidential rival, Al Gore.
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President BUSH: This is a man who's got great numbers. He talks about numbers. I'm beginning to think not only did he invent the Internet, but he invented the calculator. It's fuzzy math.
GREENE: That was in the year 2000. And, by the way, the year when President Bush now says the deficit will be cut in half is 2008, his last in office.
David Greene, NPR News, the White House.
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MONTAGNE: This is NPR News. Transcript provided by NPR, Copyright NPR.