TALK about shock and awe.
The White House's surprising admission that the federal budget deficit will approach half a trillion dollars this year poses an intriguing question:
If President Bush admits to $455 billion in red ink this fiscal year and $475 billion the next, how high will the real numbers be?
The answer: Much higher, since the latest report from the Office of Management and Budget apparently doesn't include all the costs of the United States' continuing occupation of Iraq.
Six months ago - before Iraq - the administration was estimating the deficit at $304 billion for fiscal 2003 and $307 billion for 2004. But now we know that the operations in Afghanistan and Iraq are costing $4.8 billion a month, or $58 billion a year.
Meanwhile, the recession has done a job on federal tax revenues, which have declined for the past three years. And then there are Mr. Bush's tax cuts, dutifully enacted by the Republican Congress even as the economy worsened.
While the administration claims that the return to deficits is due mainly to recession and the war on terrorism - expanded to include Afghanistan and Iraq - a new analysis by the Center on Budget and Policy Priorities indicates the cost of the Bush tax cuts is three times the tab for the war.
All this red ink is a dramatic reversal from the budget surpluses of the last three years of the Clinton Administration. The surplus hit nearly $240 billion in 2000, meaning the country now faces a negative fiscal swing of some $695 billion.
This is not good news, to put it mildly, even though the administration claims a $455 billion deficit is “manageable” in the context of a huge economy.
What deficit spending does, in addition to pushing up long-term interest rates, is burden the American taxpayer with heavy interest costs for the money borrowed by the treasury to cover the burgeoning national debt. In fiscal 2002, interest on the debt was $332.5 billion - about as much as the nation spent on defense.
For a President who has boasted about not leaving national problems for the next generation to solve, the latest deficit news gives Mr. Bush a lot of catching up to do.