http://www.usatoday.com/news/opinion/editorials/2006-07-11-deficit-edit_x.htm

Hold your applause: Deficit dip is but a drop in bucket
Posted 7/11/2006 8:30 PM ET


Great news! This year's budget deficit won't be $427 billion as forecast in February but $333 billion. President Bush touted ...
Oops, wait a minute. Those numbers are from last July's White House press release. Let's start again.

Great news! This year's budget deficit won't be $423 billion as forecast in February but $296 billion. President Bush touted this on Tuesday as evidence that his fiscal policies are working.

Forgive us if we don't break out the party hats. It is hard to get excited about an abysmally large deficit in the range of $300 billion that is somewhat less gargantuan than earlier predicted.

Even accepting the administration's assurances that it does not purposefully overestimate the numbers in a Wall Street-like game of beating expectations, this habitual mid-year crowing masks the seriousness of the nation's bleak fiscal outlook.

The government faces a severe financial crunch as the baby-boom generation prepares to retire. Runaway health costs and the swelling number of people collecting government benefits are the chief contributors to what the Government Accountability Office, the research arm of Congress, estimates to be a long-term government shortfall of $46 trillion.

In that light, the most urgent question is not whether this year's deficit is $400 billion or $300 billion, but what the administration and members of Congress are doing to head off the much larger deficits on the horizon.

The answer is: Precious little. Members of both parties willfully ignore these problems and downplay their significance. The Bush administration, meanwhile, makes matters worse by overplaying the significance of its annual budget numbers.

A $296 billion deficit this year would be only slightly better than last year's deficit, which came in at $318 billion. It would, of course, be much worse than the surpluses Bush inherited. And its true size is masked by the $172 billion Social Security surplus. Take that away, and the deficit is $468 billion, or more than $4,000 per household.

There is, to be sure, some modestly good news in the budget numbers. So far, the new Medicare drug benefit hasn't been as costly as anticipated. And tax receipts from companies and wealthy individuals have surged.

But frankly we don't see much reason to gloat. That only diverts attention from the serious financial issues that the nation faces and its leaders duck.