As this excellent column from Bloomberg.com highlights, there is a gap between the administration's rhetoric and reality when it comes to tackling the long-term budget implications of the rising costs of entitlement spending. Bush spent a lot of time last year making a big deal about the unfunded Social Security liability, and the liability for Medicare is expected to be even greater, with the administration estimating an $11 trillion shortfall.

The release of the President's budget is less than a month away, and Treasury Secretary John Snow has made it clear the budget will "call for sacrifices, no doubt about it." Like last year's "tough budget," this year's slicing and dicing is an attempt by the administration both to appear tough on spending, as well as help them pare the down the deficit -- a whopping $318 billion last year -- even further.

The Congressional Budget Office released the Monthly Budget Review on Friday, in which they reported the federal budget deficit for the first quarter of 2006 as being $119 billion. This figure is fairly close to the shortfall seen in the first quarter last year.