On July 13, the White House's Office of Management and Budget (OMB) released its annual mid-session budget review that predicted an improvement in the current fiscal year 2005 (FY05) deficit by $94 billion from its February projections. OMB claims the deficit estimate revision proves the president's tax cuts are working. Most independent analysts, however, believe the projected drop in this year's deficit is a result of tax provisions causing a one-time surge in revenue, as well as OMB's continued omission of certain costs in its deficit calculations. OMB now projects the FY05 deficit will be $333 billion, down from the $427 billion estimated in February. Even with this decrease, this year's would still be the third largest deficit in U.S. history (after the deficits from FY03 and FY04). The primary reason for such huge deficits is a combination of overwhelmingly large, unpaid-for tax cuts that have lowered revenues for the government to their lowest levels (as a percentage of the economy) since the 1950s, coupled with significant increases in overall federal spending. Thus the administration’s "good news" regarding the lower deficit should be seen as relative only in its relation to previously biased forecasts than to any measure of economic soundness. When a more long-term view is taken, the argument that these new projections are positive economic indicators seems dubious. This is the second year in a row that OMB has drastically decreased deficit projections in their mid-session review, causing some analysts and political commentators to suggest the administration artificially inflated their initial estimates, in order to claim progress later on in the year. In fact, this was originally suspected when initial FY04 deficit estimates were released by OMB at the beginning of 2004. In February 2004, OMB projected a $521 billion deficit for FY04 while most other analysts, including the Congressional Budget Office, projected significantly smaller deficits. By the time OMB released its mid-session review in July, 2004, it had lowered its deficit projections to $445 billion. The administration claimed victory for reducing deficits. Yet compared to 2003, deficits were increasing, and at an alarming rate. Still worse, the $445 billion July 2004 projection was also criticized as being inflated. Three days after OMB released its $445 billion figure, the Treasury department released quarterly deficit data indicating a $418 billion deficit for the fiscal year. Three days after that, the Congressional Budget Office released a report estimating the deficit for FY04 to be $422 billion. Both these figures were released in the same week that OMB released its mid-session review. When the actual FY04 deficit was reported to be $420 billion in October, the administration speciously compared it to their overstated estimates from February and July, once again claiming deficits were shrinking and its economic policies were working. Throughout the year leading up to the president's re-election bid, while the public saw reports and headlines stating that deficits were shrinking, the actual deficit increased from $375 billion to $420 billion. Goldman Sachs summed up the administration's approach to deficit forecasting in August of 2004 by saying, "The Office of Management and Budget has perfected the art of under-promising and outperforming in terms of its near-term budget deficit forecasts... This creates the impression that the deficit is narrowing when, in fact, it will be up sharply from the $375-billion imbalance of a year earlier. This process is likely to continue in October, when the fiscal 2004 deficit turns out to be lower than the current OMB forecast." A Pattern of Manipulation and Deceit The administration has a proven track record of manipulating budget projections and other fiscal estimates to further President Bush's political agenda. This practice has been implemented before, such as during the Medicare prescription drug debate. In that case, the administration went so far as to use heavy-handed tactics to keep facts about the inflated cost of the benefit under wraps until after skeptical conservatives in Congress voted to approve the legislation. Only when Congress could do nothing about it did facts about the true cost, as well as information about the length the administration went to suppress those facts, finally emerge. The administration's cyclical use of over-inflating deficit projections throughout the year and manipulating other cost estimates when it is politically expedient is more than just bad economic and budgetary policy. It is a deception of the Congress, the media, and ultimately the public about the fiscal health of the federal government and the consequences of the administration's economic policies. It represents more than just harmless technical changes or innocent mistakes, but a fundamental willingness by the administration to use fiscal analysis for political benefit. Such practices undercut a basic principle of democracies, which depend on an informed citizenry to make decisions about which policies (and, in turn, which politicians) are best for the country. Therefore, the numbers produced by the administration should not be taken seriously as objective fiscal analysis but rather as what they are - a political tool to further an ideological agenda. The administration's intentional misrepresentation of deficits and other fiscal projections, in order to achieve a desired conclusion, is manipulation that is frightening, unacceptable, and unfortunately, all too common.