Thursday, January 27, 2005
What was the best part about yesterday's Congressional Budget Office (CBO) budget projections for the next decade? Certainly not the projections themselves, which showed the United States awash in red ink as far as the eye could see. No, the best part was that reporters quickly noticed that the CBO's projections vastly understated the true size of the long-term deficit. The White House, it seems, is finding it tougher and tougher to conceal its own fiscal insanity.
Early in the day, both the New York Times and the Washington Post were quick to note that the CBO projected a reduced deficit for 2005 only because the White House had not yet included any spending for Iraq. Indeed, even without those figures, it was immediately obvious that the deficit had worsened considerably. As the Washington Monthly's Kevin Drum pointed out, "Last September CBO was projecting a 10-year deficit of $861 billion not counting Iraq. Today, CBO is projecting a 10-year deficit of $1,364 billion not counting Iraq. In other words, the projected deficit sans Iraq has gone up 58%."
Later in the afternoon, Bush administration officials admitted that the White House would ask for at least an additional $80 billion for Iraq, bringing the 2005 deficit up to a record $427 billion. To put that number in perspective, last summer the White House predicted that the deficit would fall from 2004's $412 billion. Now that we can discard that prediction, however, it's difficult to see how Bush will even come close to fulfilling his promise of halving the deficit by the time he leaves office. That's especially true now that military officials have estimated that the U.S. will likely keep at least 120,000 troops in Iraq for the next two years. As defense analyst John Pike, told Reuters, military spending for Iraq may continue to grow "because we just don't know the rate at which the insurgency will grow or subside, and we don't know the rate at which the Iraqi security forces can be stood up."