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[Tyrone Slothrop]

Originally posted by Stan Collender at the National Journal
At some point over the next few weeks, the Office of Management and Budget will release the administration's midsession budget review and try to convince everyone the federal deficit is falling. Don't believe them. OMB is likely to say its latest projection shows the fiscal 2004 deficit will be around $420 billion, about $100 billion less than the $521 billion the administration forecast when it released its budget in February. Administration officials will say this is an indication of how much better the budget outlook has gotten over the past few months and that the president's policies are working.

What they won't say is that the deficit situation is actually getting worse. A $420 billion deficit... record will replace the one set last year, when the deficit reached $375 billion. The administration also won't say that the "improvement" is due to what now must be taken as a consistent pattern of questionable projections and forecasts. Last year's midsession review projected a fiscal 2003 deficit of $455 billion. A mere 10 weeks later, when the actual number turned out to be $80 billion less, the White House claimed the lower number was because of the president's economic program and sound management. But the "improvement" was mostly due to the unrealistically high forecast included in the midsession review. There is almost nothing that can be done in the last quarter of a fiscal year to increase revenues or reduce spending by anything close to $80 billion. This forecasting was either politically motivated or just plain bad, and the characterization of it as an improvement was nothing more than spin.

If the widely expected $420 billion deficit figure turns out to be correct, then it will not be wrong if the White House claims the budget outlook has improved compared to what it previously forecast. But it will be wrong for the administration to say the deficit is falling when, in fact, it is rising. Not only would such a claim be disingenuous, it would continue to harm the White House's already damaged credibility on the budget and economy...