[Theophylact]

"Touts" is right:

Quote:

Deficit's Good News Less Than Meets the Eye

by Joel Havemann, Times Staff Writer
July 11, 2006

WASHINGTON — When President Bush releases the traditional midsummer update on the budget today, he is expected to announce that federal revenue has soared above predicted levels and that the deficit is headed for a welcome decline from earlier estimates — as much as 30%, or $125 billion, below the level projected just five months ago.

And the president will likely attribute the windfall to his tax cuts, which the administration says are stimulating economic activity and generating the torrent of tax revenue.

But the apparent good news will not strike some economists as surprising: This will be the third year in a row that the administration put forth relatively gloomy deficit forecasts early on, only to announce months later that things had turned out better than expected. To some skeptics, it's beginning to look like an economic version of the old "expectations" game.

Even economists who hesitate to accuse the White House of playing games say the claims of good news on the budget are unfortunate because they make people unjustifiably sanguine about the government's current fiscal health.

And the focus on this year's budget will distract attention from the real budget crisis, which will begin in two years as the eldest of the baby boom generation become eligible for Social Security benefits.

"Our problem is our large long-term deficit, and the sooner we deal with that the better," said Comptroller General David M. Walker.

Walker, who is head of Congress' Government Accountability Office, warned of "a false sense of security. We're in much worse shape fiscally today than we were a few years ago."

To divert attention from that continuing reality, critics suggest, the administration has borrowed a gambit favored by political candidates, who commonly try to lower expectations about how they will fare to magnify the apparent size of their victory if they win.

In the case of the budget, they say, the administration has begun to low-ball its revenue estimates at the beginning of a budget cycle to set up good news a few months later.

"The White House would have signaled that it was serious about the budget if it had decided not to spin the numbers," Stanley Collender, a budget specialist with Qorvis Communications, wrote for National Journal. "The fact that it is choosing to do so points out directly that, in spite of what appears to be good numbers, nothing much will have changed."