It’s hard to know how much emphasis should be put on the president’s 2005 Budget. On one hand, it lays out the president’s main policy objectives – mainly tax cuts for upper income individuals, increases in defense spending, and real cuts for many domestic services. On the other hand, the cost estimates, deficit forecasts, and other analyses are fundamentally misleading.

It’s hard to know how much emphasis should be put on the president’s 2005 Budget. On one hand, it lays out the president’s main policy objectives – mainly tax cuts for upper income individuals, increases in defense spending, and real cuts for many domestic services. On the other hand, the cost estimates, deficit forecasts, and other analyses are fundamentally misleading.

Those that have actually gone through the numbers have found a wide range of budget gimmicks. Overall, the budget attempts to minimize the size of the deficit without appearing to cut popular and important services.

As budget analysts, we are deeply disappointed and concerned with the frequency and magnitude of these tactics. Honest budgeting and accounting is a fundamental prerequisite for sound decision making in a democracy.

Here are just some of the most blatant examples:

• The budget only provides revenue and spending numbers for 2005-2009, even while – according to the Budget’s own numbers – 87 percent of the 10-year revenue costs of the proposals occur after 2009. Congress must look at the 10-year costs when passing legislation, so only presenting 5 years worth of budget numbers is inadequate.
• Programmatic detail normally published in the budget was omitted, leaving Congress, journalists, and independent analysts leafing through a 999 page computer printout by the OMB.
• The costs of rebuilding Iraq and Afghanistan after Sept. 30 of this year are not included, nor are there any ongoing funds included “for the Defense Department’s participation on the global war on terrorism.”
• Another huge cost is that the president dodges a long-term problem with the Alternative Minimum Tax (AMT) by proposing a fix for 2004 and 2005 only. The budget states, “long-term change is needed” (page 263, 2005 Budget, Analytical Perspectives.) A real fix to the problem would require adding billions to the deficit, which, presumably, is why a real fix is not included in the final totals.
• There is a table on the cost of the president’s proposals, which only looks at the revenue costs, even though footnotes cite tens of billions in outlay costs as well (Table, S-9) Why not include all costs of proposed programs?
• There are proposed changes to the budget “baseline” and Pay-As-You-Go (Pay-Go) rules that would enable tax cuts to be made permanent without properly accounting for their costs, and would allow additional corporate tax cuts to be passed at a lower threshold than spending for education, national parks, child nutrition, scientific research, Medicare benefits, or any other services. See [article on budget rules] for more details.