Bush's Surplus Lies

Imagine a fellow comes to your front door, introduces himself as a candidate for city council chairman and tells you he has a kick-ass economic plan. The town treasury has accrued a modest surplus, and he's proposing to give it back to the taxpayers of the town. "It's your money," he says.

What about using that money, you ask, to build a town library, or renovate the local hospital, or fund an after-school program for disadvantaged youths, or rebuild the decades-old bridge on the far side of town? "It's your money," he says.

You have to admit, he has a point. If the town had collected more revenues than anticipated, why not send it back? You might wonder if this rebate will return a disproportionate amount to the well-to-do -- who are well-connected in city hall -- than the average working mugs. But the principle has a logic to it. "Besides," he says, "leave it with the members of city council, and they'll just find ways to spend it."

Perhaps you're sympathetic with his proposition. Then he adds, "And I got another idea." He explains he wants to boost the budget of the police department by over 10 percent. "Hold on," you reasonably say, "how are we going to pay for that, right after you eliminated the town's surplus?" He replies, "Nothing is too good for our men and women in blue."

That doesn't strike you as a responsive answer; you try again: "Will you cut other programs to finance this increase? Or are you planning to dip into the city pension fund for this? Or will we engage in deficit spending and have to borrow money?" He smiles and answers, "Our police force must be second to none."

Your frustration mounts, you grab him by the collar and say, "You realize that you're proposing a major addition to the town budget without saying how you will pay for it and that you want to give back the very dollars that could fund this initiative?"

"It's your money," he says.

What else is there to do but slam the door and send George W. Bush on his way?

While Bush was vacationing -- or vacating? -- in Texas, pretending to be a plain ol' guy (who owns a spread of several hundred acres and who gets four weeks of time-off after being in a job only six months), new economic numbers made him look as phony as our hypothetical candidate. It turns out that the latest White House budget projections (calculated using questionable accounting tricks and over-optimistic assumptions regarding economic growth) show that the government this year will post a $1 billion surplus, rather than the $124 billion surplus forecasted four months back.

Why the change? Bush's tax cut and the economic slowdown. And the picture's the same for next year: another measly $1 billion surplus. A $2 billion surplus is foreseen for 2003, and the new budget forecast shows the ten-year surplus -- not counting Social Security and Medicare -- has fallen from a whopping $2.5 trillion to a next-to-nothing $38 billion.

Those among us who are not stricken by Alzheimer's should recall that when Bush was promoting his trillion-dollar-plus tax cut -- about a third of which will go to the top one-percent of earners -- he claimed that it would not gobble up the entire surplus, that there would still be money for new spending, and that there would be no need to dip into the separate Social Security surplus, now estimated at $157 billion. (Both parties have loudly pledged to keep the Social Security surplus in the infamous "lockbox" and not to use it to fund other government programs.) Bush's assertions have all crapped out. The non-Social Security surplus has gone poof, the tax cut has swallowed funds available for new initiatives (such as a fully-funded Medicare prescription drug benefit), and on Capitol Hill there is a growing assumption that legislators might have to tap into -- or as they say in Washington, "raid" -- the Social Security surplus (after already spending most of Medicare's $28 billion surplus) to cover the cost of the government in the coming year.