A Credibility Deficit

By Dan Froomkin
Special to washingtonpost.com
Monday, February 7, 2005; 12:39 PM

The White House today released the four-volume, 2,476-page tome officially called "The Budget of the U.S. Government" -- and it sure isn't light reading.

But its two biggest, most newsworthy assertions are, arguably, might require some suspension of disbelief.

First, there's the 150 domestic programs slated for termination or drastic cuts. You will not find one person in Washington today who actually believes this will happen.

And then there's the deficit. President Bush says this budget shows him on track to cut it in half by 2009. But the numbers say otherwise.

In fact what with all the money being spent on the war, enormous tax cuts and a new Medicare prescription benefit -- not to mention the possible additional borrowing of trillions to pay for private Social Security accounts -- it's hard to see any significant downward pressure on the deficit anytime soon.

Unless of course you could do something really big like dramatically cut Social Security benefits. . . .

Those Proposed Cuts

Mike Allen and Peter Baker write in The Washington Post: "Some congressional officials pronounced many of the proposed cuts dead on arrival. One lawmaker involved in the negotiations said that House and Senate leaders have told the White House that no more than two dozen of the 150 proposals are likely to be accepted, although Congress might agree to reductions in some programs targeted for elimination."

Jonathan Weisman writes in The Washington Post: "A year ago the White House targeted 65 programs to save nearly $5 billion. But Congress agreed to ax only five of them -- and restored a previously eliminated . . . trade-relations program with historic whaling partners, and the saving shrank to $292 million. . . .

"The White House will brandish independent studies on program effectiveness, appeals for lawmakers to set priorities, and, on occasion, some rhetorical creativity. The deep cuts to community development, for example, have been titled the 'Strengthening America's Communities Initiative.'

"But independent studies on a program's lack of effectiveness have thus far been no match for the power of a corporate lobbyist or the tug of heartstrings by poor children marshaled to make the case for continuing a program."

A Few Highlights

Robert Pear and Carl Hulse write in the New York Times: "President Bush's budget would more than double the co-payment charged to many veterans for prescription drugs and would require some to pay a new fee of $250 a year for the privilege of using government health care, administration officials said Sunday."

Pear reported on Sunday: "President Bush will seek deep cuts in farm and commodity programs in his new budget and in a major policy shift will propose overall limits on subsidy payments to farmers, administration officials said Saturday."

That Booming Deficit

The headline writer for this Edmund L. Andrews story in the New York Times cut right to the chase: "Trim Deficit? Only if Bush Uses Magic."

Andrews writes: "The economy is growing. Tax revenues are climbing. But can these factors rescue President Bush from a federal deficit that seems stuck above $400 billion?

"The answer, unfortunately, is almost certainly no, analysts say. . . .

"The cornerstone of Mr. Bush's budget strategy is a belief that vigorous economic growth, spurred by supply-side tax cuts that were designed to provide incentives for upper-income Americans to produce more wealth, will generate big jumps in tax revenue that gradually reduce the deficit."

Andrews explains why those beliefs are not justified.

"One reason is that Mr. Bush's tax cuts of 2001 and 2003 went largely to the nation's wealthiest taxpayers, the same people who accounted for the unexpected flood of tax revenue last time around."

In fact, unless Bush is willing to back down on some of his signature issues, there's really only one place to go to get the budget house in order -- and that's entitlements, which make up about two-thirds of the $2.3 trillion federal budget.

Joel Havemann writes in the Los Angeles Times: "The budget President Bush will present to Congress today will show the federal deficit cut in half by the time he leaves office in four years.

"At least technically it will."

But, Haveman writes: "The problem, watchdog groups say, is that the government's spending habits and penchant for cutting taxes do not match the administration's budget-restraint rhetoric."

John F. Harris writes in The Washington Post that "as Bush prepares to release his proposed fiscal 2006 budget today, some Republican lawmakers and fiscal experts are warning that the arguments he invoked in his first term for tolerating big deficits -- mainly the twin demands of war and recession -- are no longer sufficient to justify mounting debt."

The Cheney View

Here's an excerpt from the transcript of Cheney's appearance on "Fox News Sunday":

"We are being tight. This is the tightest budget that has been submitted since we got here. The increase in discretionary spending, which includes an increase in defense, increase in homeland security, that whole account, all discretionary spending, actually will be held below the rate of inflation. And that means some of your non-defense discretionary programs are going to get hit. About 150 programs are slated to either be eliminated or reduced. . . .

"But they're [programs] that we very carefully evaluated, that we've looked at to see whether or not -- are they doing what they're supposed to be doing? Are they performing up to snuff? Is this a legitimate ongoing requirement of the federal government? Are there better ways to provide these services? Are there consolidations in savings that are possible? And we've come up with savings that get us to that level.

"I think you'll find, once people sit down and have a chance to look at the budget, that it is a fair, reasonable, responsible, serious piece of effort. It's not something we've done with a meat axe, nor are we suddenly turning our backs on the most needy people in our society."

Bolten on the Line

Holly Rosenkrantz and William Roberts write for Bloomberg: "Joshua Bolten, the White House budget director, joked in a speech to the U.S. Chamber of Commerce last month that spending will be so tight this year that he may need a 'security detail' to fend off threats from Cabinet members.

"As President George W. Bush presents his $2.5 trillion budget to Congress today, Bolten may also want protection against skeptics, including some Bush allies, who question whether the administration can deliver on its pledge to curb a record deficit."

Bolten himself authors an op-ed in USA Today: "If enacted, President Bush's 2006 budget policies will keep us on track to meet the goal of cutting the deficit in half by 2009, with further deficit reductions in the years following.

"In about a decade, however, our budget faces an unsustainable burden of huge unfunded obligations in entitlement programs, including Social Security. No amount of plausible discretionary spending cuts or tax increases could fill the gap.

"That's why it's important for Congress to act on the president's proposals to save and strengthen Social Security. In the short- and long-run, President Bush is offering the right proposals to overcome fiscal challenges and keep our economy strong."

One Scenario

Okay, read that Bolten excerpt carefully, and tell me if this is a plausible scenario: Bush cuts Social Security benefits dramatically. As a result, the government never has to pay the Social Security trust fund back for all the Treasury bonds it has bought over the years with excess payroll taxes. That indeed reduces deficit pressures significantly, allowing the Bush tax cuts to become permanent.

As you may recall, the payroll tax is incredibly regressive -- because it's capped, the poor pay a much larger percentage of their income than the rich. As long as the money stays in the Social Security system, with its progressive payment formulas, they get paid back in their retirement with a better return. But in this scenario, a regressive tax on the poor would retroactively be subsidizing a tax cut that goes primarily to the wealthy.

A Blog Classic?

Is the blogosphere now old enough for there to be "classic blog posts"? If so, this one from the Decembrist blog just may qualify. It's called "How to Read the Bush Budget" and actually dates from one year ago. It describes, for instance, the "four different kinds of cuts that will be in play."

They are, essentially:

1) Real cuts to programs whose congressional defenders are out of power and whose beneficiaries are not swing voters.

2) Cuts that will simply never happen and everyone knows it, because their lobbies or chief sponsors are relentless.

3) Cuts that the administration will itself reverse with great fanfare.

4) Measures that can be used to reduce apparent spending on entitlement programs.

Social Security Watch

Christopher Lee writes in The Washington Post: "Vice President Cheney acknowledged yesterday that the federal government would need to borrow trillions of dollars over the next few decades to cover the cost of the personal retirement accounts at the heart of President Bush's plan to restructure Social Security."

Oren Dorell writes in USA TODAY: "Powerful combatants in the fight over President Bush's plan to overhaul Social Security have launched a lobbying war that's turning into the biggest since the battle over health care in 1994."


Allan Sloan, writing in Newsweek, outs the "senior administration official" who gave this seminal background briefing last Wednesday. He writes, offhandedly, that it was Charles P. Blahous III, also known as Chuck, the White House's Social Security point man.

That briefing, enigmatic as it was, remains the most detailed given by the White House about how private accounts would work.

Here's Blahous's White House bio. Note that he received a Ph.D. in computational quantum chemistry. Maybe that explains all the uncertainty.

Sloan, by the way, writes: "Bush has marketed the pants off the Democrats by setting the terms of debate. Do you want to pay higher taxes or lower taxes? Clearly, lower. Do you want to pay estate tax or not? Do you want private accounts, or don't you? He's done a fabulous job of showing the goodies -- - and of hiding the costs. People, naturally, have opted for the goodies. The Bushies are in full sales mode, including sticking recordings on Social Security's phone lines preaching that the system has to change. In the name of empowering my kids, he's asking them to pay full freight for my retirement and for trillions in new borrowings, while forking over the same wage taxes for lower benefits. If he can sell this one, the Marketing Hall of Fame should start planning his induction ceremony."

Barnstorm Watch

Here are transcripts of Bush's campaign-style appearances on Friday in Omaha, Little Rock and Tampa.

More tough questions, like this one in Tampa:

"Q. First of all, I'd like to say that I'm a volunteer -- one of your very loyal and dedicated volunteers in Plant City. . . . And I'm very happy to have you as the President. . . . Whatever program that you put out for Social Security I'm fully behind it. You have my support."

But outside the arenas where Bush spoke -- or heck, even inside them, but unvoiced -- some problems for the president.

Ron Hutcheson and Lesley Clark write for Knight Ridder Newspapers: "The hearty applause that greeted Bush at every stop on his five-state tour Thursday and Friday was mingled with quiet murmurings of unease about his intention to revamp a program that's become an integral part of American life."

Joanna Chung writes in the Financial Times: "Beyond the perimeters of the convention centre in downtown Omaha where President George W. Bush spoke to a friendly crowd last week, plans for pension reform met doubts, questions and resistance."

Broke? Bust? Bankrupt?

Larry Lipman writes for Cox News Service: "Broke. Bust. Bankrupt. President Bush has used all these terms to describe Social Security's long-range future, but Democrats and some economists say he's painting a misleading picture to stampede the public into accepting a radical restructuring of the program. . . .

"Experts differ on the use of the term bankrupt in describing Social Security's future."

Most of the ones Lipman quotes don't think it's legitimate -- including David M. Walker, comptroller general of the United States.

But Bush himself has now found a whole bunch of economists to agree with him. They happen to work for him.

The Council of Economic Advisers on Friday released a new memo on Social Security.

More of the Same

The Newsweek headline over a piece by Allan B. Hubbard, the assistant to the president for economic policy, promises an explanation of "why the president is pushing ahead with his plan to overhaul Social Security."

But it's just more of the same, and has its share of misleading assertions. Here's one: "Members of Congress, like employees of the Executive Branch, already know that personal accounts are a good idea. They have something similar, through a program that is available to federal employees. . . . President Bush wants American workers to have the same opportunity."

Actually, that system is an add-on to Social Security. Big difference.

To Change or Not to Change

Fareed Zakaria writes in Newsweek: "The Iraqi elections occurred because George Bush changed course, junked a previous plan and adapted to realities on the ground. In fact, much of the progress in Iraq over the past eight months can be traced to Bush's willingness to reverse himself. The enduring problems in Iraq, on the other hand, developed and grew because his administration doggedly refused to recognize errors and make changes. This is more than a point of historical interest. Going forward in Iraq -- and beyond -- we will need more of Bush's suppleness and less of the much-lauded steadfastness."

Nicholas Confessore writes in the New York Times that Bush might be well advised to back down on Social Security. But, he writes, "if the past is any guide, he is unlikely to change direction. Time and again during his first term, President Bush ignored the informal rules that once delimited what was possible in political life, ushering in transformative changes to American political life whether or not the public demonstrated a strong appetite for them in advance. By comparison with ambitious presidents of the past, Mr. Bush has made a habit of creating his own momentum."

Ronald Brownstein writes in the Los Angeles Times that Bush is "facing a potentially decisive shortage of two ingredients indispensable to a cause as big as restructuring Social Security: money and trust. Without more of both, Bush appears to be headed for a crackup."

So he might want to consider another option.

"A more promising alternative might be to establish investment accounts as an add-on to Social Security, funded by a new source of revenue (like a small consumption tax), not the payroll tax."

Coming to Visit

Reuters reports: "Secretary of State Condoleezza Rice said Monday that Israeli Prime Minister Ariel Sharon and new Palestinian President Mahmoud Abbas would visit the White House for talks in the spring."

WMD Commission Watch

Walter Pincus writes in The Washington Post: "President Bush's commission to study intelligence, appointed one year ago yesterday, has taken on greater importance as the administration struggles to restructure the U.S. intelligence community as required in the bill passed by Congress in December.

"Vice President Cheney yesterday described the president's panel, officially titled the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction, as 'one of the most important things going forward today.' "

Stewart M. Powell writes for Hearst Newspapers: "The White House-ordered inquiry into the intelligence failures about Iraq's weapons of mass destruction won't blame individual officials for the errors that contributed to President Bush's decision to start the war almost two years ago.

"Instead, the nine-member commission will emphasize how the United States should deal with future threats, according to commission spokesman Laurence McQuillan."

Gonzales Watch

Dana Milbank writes in The Washington Post: "For those wondering how much distance new Attorney General Alberto R. Gonzales will keep from the White House, here's an early clue: He's taking three White House lawyers with him to be his top aides at the Justice Department."


Marian Burros makes it clear in the New York Times that Walter Scheib 3rd has in fact been fired as White House executive chef.


Elisabeth Bumiller writes in the New York Times: "If you ask the White House what President Bush is reading these days, the press office will call back with the official list: 'His Excellency: George Washington' by Joseph J. Ellis, 'Alexander Hamilton" by Ron Chernow and, not least, the Bible.

"What the official list omits is Tom Wolfe's racy new beer- and sex-soaked novel, 'I Am Charlotte Simmons.' The president, a fan of Mr. Wolfe, has not only read the book but also is enthusiastically recommending it to friends."

This is so much more fun than writing about Natan Sharansky.

"Does Mr. Bush like the book because it is a journey back to his keg nights at Deke, or because it offers a glimpse into the world of his daughters' generation? Or does he like the writing? Or is it all of the above? The White House won't say."

Mainstream Media Watch

Nicholas Lemann writes in the New Yorker about why people are mad at the mainstream media and starts with media critic number one -- Karl Rove.

A few days before the election, it turns out, Bill Keller, the executive editor of the New York Times, and Philip Taubman, the paper's Washington bureau chief, had drinks with Rove and White House communications director Dan Bartlett. Rove, apparently, went off.

White House Correspondents Watch

Peter Johnson writes in USA Today that "most broadcast and cable networks are sticking with White House correspondents who covered President Bush's first four years, while some newspapers and magazines are realigning their teams. . . .

"Meanwhile, White House correspondents are split on how relations between them and the administration will shake out.

"Fox anchor Brit Hume, a former ABC News White House correspondent, says that 'if anything, it's going to get more tense. Reporters tried to hold Bush to account in the campaign, and (he) got re-elected. They're not going to let him get away with that stuff again.'

"As a newcomer, Fox's [Carl] Cameron says that he senses a 'level of hostility' between the press corps and the administration 'that's hard to tell who started it.'

"But CNN's [John] King predicts warmer relations between the press corps and administration."

Today's Calendar

Bush meets with his cabinet to talk budget, then participates in a photo opportunity with Kurt Busch, the 2004 NASCAR Nextel Cup champion. No relation.

Cheney's Fashion Non-Statement

Washington Post ombudsman Michael Getler weighed in on "snorkelgate" on Sunday. Last week, Post fashion writer Robin Givhan caused quite a stir with her article criticizing Cheney for wearing a fur-trimmed parka and ski cap to the formal ceremonies marking the 60th anniversary of the liberation of Auschwitz.

Getler's only complaint: "I would, however, have voted for a call to the veep's office to see if there was some special reason for that outfit."

OK, but what good would that have done, really?

Getler proves that point himself: "When I tried, officials would talk only off the record. My best guess is simply that it was very cold."

And here's Cheney's nonanswer to Chris Wallace's question on that topic on "Fox News Sunday":

"WALLACE: You, in an unaccustomed way, made the fashion pages recently with your choice of clothes for the 60th anniversary of the liberation of Auschwitz. The Washington Post said, 'While other world leaders were dressed' -- and you can look at the pictures here -- 'in formal coats, the vice president was dressed in the kind of attire one typically wears to operate a snow blower,' and then asked, 'Would you have taken the oath of office with a ski cap on?' How do you respond to that, sir?

"CHENEY: Well, I was privileged to go to Auschwitz to participate in the 60th-anniversary ceremony. It was a very moving experience. That was just a very short piece of the two-day session we had there. . . . "

And so on, with no mention of the parka.

Wallace then moved on to his next question: Is Cheney going to run for president in 2008?

"Hell, no," Cheney replied, showing he can give a direct answer when he wants to.

© 2005 washingtonpost.com