I'm in the middle of a really busy day, going all over town for clients. But I just couldn't pass this one up. Bush made some statements in a press conference today that are just - well - outright lies about what is happening with the deficit. More below the fold.
"The budget numbers are proof that pro-growth economic policies work. By restraining spending in Washington and allowing Americans to keep more of what they earn, the economy's creating jobs and reducing the deficit, making our nation a more prosperous nation for all our citizens," Bush said at a White House news conference otherwise dominated by questions about North Korea and Iraq.
OK - let's take this one lie at a time.
By restraining spending in Washington
This is one of the most outrageous claims the Bush administration can make. According to the Congressional Budget Office, Bush increased discretionary spending from $649.3 billion to $967.9- an increase of 49.06%. At the same time, the GDP price deflator increased from 101.507 to 114.048 far an increase of 12.35%. That makes Bush's total increase in discretionary spending 36.71%.
Bush has restrained spending to the extent the Cato Institute called him The Biggest Spender Since LBJ.
Bush boasted that the final figure shows the White House managed to outperform his original goal of cutting the deficit in half by fiscal 2009 from its 2004 projected peak of $521 billion, or 4.5% of GDP.
Once again, the press falls for this great PR BS line. The Bush administration is using the unified budget. This includes all of the government agencies that have a surplus which is supposed to be saved for later years (like - for example - the Social Security Trust Fund). When you look at how much debt the Treasury Issued, you get a very different story. According to the Bureau of Public Debt, the US Government Issued $574 billion in net new debt in 2005 -- hardly a sign the deficit is anywhere near under control.
Individual income-tax receipts grew by 12.6% from fiscal 2005, to $1.044 trillion.
First, it should come as no surprise that revenues from individual taxpayers increase during an economic expansion. What the press and Bush fail to note is receipts from individual taxpayers were $994 billion in 2001. That makes Bush's total non-inflation adjusted gain in individual tax receipts a whopping 1%. Wow - that Laffer Curve is out in full force.
I hate to break this to any fiscal conservatives who really want to believe this "tax cuts increase revenue" and Republicans control spending" garbage is working -- but, it's not working. It didn't work under Reagan and it's not working now.