A Deficit You Can't Refuse

Kay: It made me think of what you once told me -- "In five years, the Corleone family will be completely legitimate." That was seven years ago.

Michael: I know -- I'm trying, darling.

-- The Godfather, Part II

I don't mean to sound cynical, but it's starting to look as though the Bush administration does not seriously intend to get the federal budget in order. At least that's the impression I got from White House Press Secretary Scott McClellan's attempt this week to explain the unfortunate fact that the administration projects that the deficit will climb this year.

To grasp the full vacuity of the administration's rationalization, you need to consider it piece by piece. Here's how McClellan began his response to a reporter's question about the growing deficit: "And in terms of the deficit, the president has a deficit reduction plan. It's based on strong economic growth and spending restraint."

So the two elements of this plan are strong economic growth and spending restraint. Let's begin with the growth.

"Strong economic growth" means an expanding economy that produces large gains in tax revenues. The trouble is that the economy, as the administration has been reminding us for a long time, is already growing, yet tax revenues are not rising anywhere fast enough to meet the level of spending. Tax revenue accounted for 20.9% of the economy in 2000 and is projected to account for just 16.8% this year. A really hot business cycle can usually push tax revenues up a couple percentage points in a great year. Even if that were to happen in 2005, calling this a deficit reduction plan is like assuring your teenager that you have a plan to pay for her education, and it involves her growing 10 inches and winning a basketball scholarship. And no, dear, this growth plan has nothing to do with that new luxury yacht I just bought myself.

Phase 2 of the "plan" is spending restraint. President Bush is confining his spending restraint to domestic discretionary spending, which accounts for about $500 billion, less than a quarter of the budget. So, as I noted on this page a few weeks ago, programs like the National Science Foundation will suffer a budget freeze.

If he can get Congress to accept his spending limits -- something he's tried and failed to do in every year of his presidency -- we would chop a whopping $9 billion from the deficit. The deficit, let me remind you, will exceed $400 billion.