“Bush Says Plan Would Balance Budget by ’12,” an article in yesterday's New York Times, includes this sorry sentence: “During his re-election campaign in 2004, Mr. Bush promised to cut the deficit in half by 2009. Though the prediction was greeted with widespread skepticism, that goal now looks increasingly plausible.” Indeed, that prediction was met with widespread skepticism, but not because it seemed implausible. As we have noted, President Bush and OMB inflate deficit forecasts in order to claim victory when actual deficit numbers turn out to be smaller.

Yesterday in the Wall Street Journal, ($) President Bush sketched out some broad themes and a few bold claims for the final two years of his presidency. Many in the media have commented on Bush's call to cut earmarks in half this year, but I wanted to highlight a small part of the op-ed that has been overlooked. Bush wrote: Because revenues have grown and we've done a better job of holding the line on domestic spending, we met our goal of cutting the deficit in half three years ahead of schedule. By continuing these policies, we can balance the federal budget by 2012 while funding our priorities and making the tax cuts permanent. (emphasis added) I'll ignore for the moment Bush's continued misleading claims about cutting the deficit in half and how really insignificant that will be in the long run. I'm more concerned that Bush believes we have funded and will continued to be able to fully fund our most crucial priorities. The president is still under the false impression we can tackle difficult challenges without anyone having to sacrifice.

Over the holidays, incoming Senate Budget Committee chair Kent Conrad (D-ND), the incoming House Budget Committee chair John Spratt (D-SC), and the Senate Budget Committee chair Judd Gregg (R-NH) sent a letter to President Bush reminding him to include the full costs of the Iraq and Afghanistan military operations in his regular budget submission for FY 2008, expected on or about February 7, 2007. The letter opens:

CongressDaily ($) is reporting that House Republicans are drafting their own minimum wage increase legislation that will not include an estate tax provision. Here's the key passage: The decision to pass on the estate tax reflects an effort on the part of Republicans to avoid heated partisan conflicts such as the pitched battle over the so-called trifecta bill last year, according to aides. Looks like the GOP has decided the "trifecta" strategy from last year wasn't such a winner for them.