Anybody who listened to President Bush speak during his campaign heard a few specific messages reiterated again and again, loud and clear. One addressed the federal budget deficit, which at 3.6 percent of GDP (gross domestic product) in 2004 was the highest it has been in over a decade. Bush has vowed to halve the deficit by 2009. He repeated this promise in a December press conference, stating he will cut the deficit in half while continuing to pursue both making the 2001 and 2003 tax cuts permanent and providing “every tool and resource for our military.” There are many factors working against the president in his quest to fulfill this promise. In 2003, total tax receipts for the federal government were 16.5 percent of GDP – their lowest level since 1959. The U.S. dollar continues to decline in value and the United States has become more reliant on foreign borrowing to finance the government. In addition, Bush has promised to fully fund a costly war in Iraq and extended military operations around the world in the war on terrorism and continues to push for privatizing Social Security, a proposal that many analysts estimate could cost up to $ 2 trillion in transition costs. With all these factors, many are wondering how the president plans to do it. One way will be to propose a lean federal budget for FY 2006; a budget leaving many programs that Americans depend on dramatically underfunded. Bush has discussed his FY 2006 budget as being both a “tough budget” and a “budget that fits our times,” but this really means one thing: less money set aside for non-defense discretionary spending. These cuts will do little to alleviate the budget deficit. It is convenient for this administration to have such a large budget deficit so it can further its political priorities of shrinking the size and role of the federal government in the name of fiscal discipline. But the cuts the president will make in non-defense discretionary programs in his FY 2006 budget will do little to ease the budget deficit compared to rolling back some or all of the 2001 and 2003 tax cuts. The administration will certainly continue to use a “reducing the deficit” rationale to justify imposing entitlement caps in the FY 2006 budget. Entitlement programs, such as Medicare and Medicaid, are funded by formulas set in law and not subject to the annual appropriations process. But by including entitlement caps in the budget, the Bush administration will further erode an important aspect of the social safety net just so they can avoid rolling back tax cuts for the super wealthy. It has recently emerged the administration has another way of battling the budget deficit besides excessively cutting funding for programs and agencies. News sources, including the New York Times, reported the administration plans to both use the numbers to their advantage and omit the costs of certain major initiatives and policies. The Times reported on Jan. 2 that administration officials have “decided to measure their progress against a $ 521 billion deficit they predicted last February rather than last year’s actual shortfall of $ 413 billion.” This means that they are going to use an inflated baseline in pursuing their goal of cutting the deficit in half. Last February, administration officials predicted a federal deficit of $ 521 billion. After the fiscal year ended Sept. 30, the Treasury Department reported that the 2004 budget deficit stood at $ 413 billion – $ 108 billion less than their earlier predicted deficit. Many economists and analysts argued the February 2004 deficit forecasts had been deliberately overstated to make the real deficit numbers pale in comparison to original predictions, and thus look like the administration was doing well. An October 2004 report by the Center on Budget and Policy Priorities called the situation “misleading at best. The administration’s claim [that their policies were helping reduce the deficit] comes about only because the deficit did not increase as much in 2004 as the administration earlier predicted it would. This is like a football coach predicting his team will go from a record of 6 wins and 10 losses to a 4-12 record the next year, and then celebrating when the team ‘improves’ to 5-11.” Ranking Senate Budget Committee member Kent Conrad (D-ND) said of the situation, “I believe they were cooking the books.” Not only did the overstated deficit prediction allow the administration to claim a “victory” in 2004, but now it is also providing them with a false baseline number to use in their goal of cutting the deficit in half in the next five years. The administration also hopes to work on lowering the deficit by omitting certain costs, which in fact are very real. Primary among those are the costs of the war in Iraq and Afghanistan, which because they are funded through supplemental requests the administration refuses to count in the deficit numbers. In addition, the administration also is significantly understating the cost of future military and defense plans, according to the Congressional Budget Office (CBO). CBO recently reported that their “Future-Year Defense Plan” will cost substantially more than the amounts cited by the administration in budget projections. But the largest and most egregious of them all is the president’s plans for privatizing Social Security, which many analysts believe could cost the federal government up to $ 2 trillion. As reported in the last edition of the OMB Watcher, Office of Management and Budget Director Joshua Bolten appears unconcerned about borrowing such sums and hopes Congress and others will not see the borrowing as debt. As Bush continues to peddle his rhetoric about cutting the deficit in half by 2009, keep this in mind: the point of cutting the deficit is to help stabilize and grow the U.S. economy and improve the ability of the government to provide for the needs of all Americans. The methods President Bush may employ to meet his obligations while furthering his political goals will more likely have the opposite effect and leave us all in a much worse place.