CARL P. LEUBSDORF Bush perpetuates fiscal discipline myth

As part of his plan to trim some expensive Pentagon weapons projects and control the federal budget, President Bush is proposing to halt funding for the F/A-22 Raptor stealth fighter built by Lockheed Martin in Fort Worth, Texas.
But his new budget wouldn't cut off any funds until the year that starts Oct. 1, 2008, less than four months before he leaves office.
It's part of a familiar pattern. And it's one of the factors that explain why fiscal discipline has been more myth than reality under Bush, resulting in record federal deficits that show no real sign of going down any time soon.
While not all of these budget tricks are new, he has taken them to new levels by delaying sending the true costs of his proposals to Congress, proposing unrealistic cuts in spending, accepting phony limits on tax cuts, and continuing to push program costs onto states that -- unlike Washington -- have to balance their budgets annually.
It means that his successor, whether a Republican or a Democrat, will almost certainly inherit a fiscal mess unless the GOP-controlled Congress shows an unexpected willingness to enforce fiscal discipline or he discovers the veto pen he has never used to control spending.
It also means, as an article in The Washington Post pointed out this week, that not only will Bush fail to meet his goal of cutting the federal deficit in half by the end of his term but the deficit will almost certainly soar in succeeding years.
Here's how it's been done.
UDelay bad news. From the start of the war against Iraq, the administration has consistently delayed and understated its cost. The new budget projects a decrease in the deficit from $427 billion this year to $390 billion next year, but includes no new funds for the war. That alone ensures the deficit will go up, not down.
Bush's tax proposals are hardly less misleading. His plan included extending the 2001 cuts in the budget, but that has limited impact until 2010. He didn't deal with an unintended consequence of his tax cuts, requiring growing numbers of middle-class Americans to pay the alternative minimum tax, which is designed to ensure that wealthy taxpayers don't escape taxes.
A bill to fix this is likely, and it will reduce revenues and drive up the deficit.
UPropose unrealistic cuts. The new budget is filled with proposals to cut things such as farm subsidies, vocational education programs and weapons sought by the military services, like the Raptor. Many will never happen.
USet unreal expiration dates. When Bush sought his tax cut in 2001, there was enough congressional resistance to the $1.9 trillion cost that he agreed to trim it. But he did so by making the income tax cuts and repeal of the estate tax expire in 2010.
Long-term government budget figures show smaller deficits in part because they assume the cuts won't be extended.
But Bush has tried repeatedly to make them permanent. While Congress has been wary because of the deficit, lawmakers ultimately will have to face up to the issue, lest taxes go back up for millions of middle-class and upper-income taxpayers.
By then, however, Bush will be safely back in Texas.
UMake someone else do the tough work. Specifically, the states. According to the Center on Budget and Policy Priorities, a liberal study group, the new budget cuts grants to state and local government for programs other than Medicaid by $10.7 billion.
The budget doesn't address state complaints that the administration has underfunded costs they must incur under the No Child Left Behind education law. And it cuts total school funding by about $1 billion, according to the nonpartisan
This comes at a time when about half of the states still face substantial shortfalls unless they cut programs or raise taxes.
In about 10 days, the governors will come to town for a meeting intended in part to convince the administration to allow them more flexibility in administering Medicaid, the rapidly expanding program of health care for the poor.
Instead, they'll be trying to head off Bush's plan to force them to absorb additional cuts.
X Carl P. Leubsdorf is Washington bureau chief of the Dallas Morning News. Distributed by Knight Ridder/Tribune.

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