WASHINGTON (AP) – The government is on track to amass annual federal deficits this year and next exceeding $300 billion for the first time. Republicans insist the red ink would not be a record, a contention Democrats reject in a linguistic duel less about economics than politics.
“They’re not always engaged in an academic search for truth,” Indiana University economics Prof. Willard Witte said of both parties.
Economists agree the most meaningful way to compare historic budget figures is to factor in changes in the dollar’s value or the size of the economy. Republicans say that when inflation is considered, there have been nine shortfalls since World War II worse than the projected deficits for 2003 and 2004.
Even so, that argument is part of a weeks-long GOP campaign to downplay their deficit forecasts in hopes of aiding congressional passage of President Bush’s proposed $1.46 trillion in fresh tax cuts over the next decade.
“They’re engaged in trying to carry the day in some policy argument,” Witte said of the two parties, “so they’re bound to interpret the truth in the light that makes their case most strongly.”
Republicans and Democrats always compete for words and numbers that help them define an issue most favorably. Republicans eager to abolish the tax on large estates call it the “death” tax, while Democrats trying to taint Bush’s proposed new tax cuts label them the “leave-no-millionaire-behind” plan, a play on his “no-child-left-behind” education initiative.
In the budget Bush sent Congress last month, he projected shortfalls of $304 billion this year and $307 billion next – numbers that war and other factors are expected to make worse.
Until now, the $290 billion deficit of 1992 under the first President Bush has never been surpassed.
“How can they say it’s not a record? You don’t need a Ph.D. in economics to know $304 billion is more than $290 billion,” said Tom Kahn, Democratic staff director of the House Budget Committee.
But when Democrats and journalists began referring to the forecast deficits as a “record,” Republicans adamantly insisted that the word was meaningless because the label ignored the erosion that inflation has caused in the dollar.
When converted to the value the dollar had in 1996, Bush’s budget documents say, the projected $307 billion deficit of 2004 would be just $265 billion.
And, using those same 1996 dollars, the $290 billion shortfall of 1992 becomes $318 billion; the $55 billion deficit of 1943 is $425 billion; and there were bigger deficits in 1944, 1945, 1983, 1985, 1986,1991 and 1993.
“Many headlines erroneously proclaimed the president’s proposals would produce ‘record’ deficits,” chided a newsletter by the Senate Budget Committee, run by Chairman Don Nickles (R-Okla.) which cited “a deficit of understanding.”
The battle over how best to characterize multiyear budget figures was also waged in 1995 – when Republicans took the opposite view from their position yesterday and Democrats accused them of trying to “cut” Medicare and Medicaid.
Those two huge, popular health insurance programs for the elderly, poor and disabled grow automatically each year to cover medical inflation and growing pools of beneficiaries. In 1995, Republicans’ budget-balancing plans culled savings from both by slowing their growth.
GOP Chairman Haley Barbour even took out newspaper ads offering $1 million to anyone who could prove Republicans would “cut” Medicare. Republicans said those programs were not being cut because spending for both would still rise every year – the opposite of their view today that inflation and other factors must be considered.