$94 billion drop in federal budget deficit praised
$94 billion drop in federal budget deficit praised By James G. Lakely The Washington Times Published July 18, 2005
WASHINGTON -- The White House and the chairmen of congressional budget committees are praising a surprising drop in the federal budget deficit, but some conservatives and Democrats are calling it "propaganda" that masks the true dire state of the federal purse.
White House budget director Joshua B. Bolten testified before the House Budget Committee last week, trumpeting a $333 billion deficit for fiscal 2005, $94 billion less than was predicted in February.
The drop was caused by a 14 percent spike in tax collections and a robust stock market, Mr. Bolten said, that came "because of this president's and this Congress' pro-growth policies, especially tax relief."
Rep. Jim Nussle, Iowa Republican, chairman of the House Budget Committee, said he is "extremely pleased" with the lower deficit news and "will work to ensure this trend in deficit reduction continues."
However, Sen. Tom Coburn, Oklahoma Republican, said last week that the lower deficit number is more the result of "stealing" from the surplus in Social Security tax collections, a routine congressional practice for decades.
"This report is more of the same budget propaganda we hear from a city that refuses to confront its unsustainable addiction to spending," Mr. Coburn said. "This estimate is inaccurate and misleading."
The true deficit, the freshman senator said, is "closer to $531 billion, or $1,750 per American." That figure reflects Mr. Coburn's calculation that Congress this year will "steal" $173 billion from Social Security. He also said the White House deficit figure also does not include $32.8 billion appropriated by Congress this year in an emergency supplemental spending measure that is not included in this year's books.
"Little in today's news justifies Washington patting itself on the back," Mr. Coburn said, adding that the White House's point that the deficit is now just 2.7 percent of the size of the overall economy is merely "good spin."
"We should admit that higher-than-expected tax revenues primarily are financing an unprecedented and massive expansion of the federal government, which has grown by nearly 40 percent since 2000," he said. "The fact is neither side has the political will or courage to reduce spending and stop the raid on the Social Security surplus."
Mr. Coburn finds an ally in his concern in the ranking Democrat on the House Budget Committee, Rep. John M. Spratt Jr. of South Carolina.
"In 2001, President Bush promised that none of his budgets would ever borrow and spend the Social Security surplus again," Mr. Spratt said. "Despite that promise, all of his budgets have borrowed and spent all of the surpluses in Social Security."
Mr. Bolten said, "It has been the practice of this administration and others for decades, Democrat and Republican, to include the Social Security surplus" in deficit calculations.
Chris Edwards, the director of tax policy studies at the libertarian Cato Institute -- which is often an ally of the Bush administration -- criticized the president for failing in his pledge to restrain spending.
"The 2001 and 2003 tax-cut bills have helped the economy grow, but it would be growing faster without President Bush's huge spending increases in recent years," Mr. Edwards said. "Bush's big spending on the war, education, farm subsidies, health care and other areas have sucked money out of the productive private sector into often unproductive federal programs."
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