The Dishonesty Thing

OP-ED COLUMNIST

The Dishonesty Thing

By PAUL KRUGMAN

Published: September 10, 2004

It's the dishonesty, stupid. The real issue in the National Guard story isn't what George W. Bush did three decades ago. It's the recent pattern of lies: his assertions that he fulfilled his obligations when he obviously didn't, the White House's repeated claims that it had released all of the relevant documents when it hadn't.

It's the same pattern of dishonesty, this time involving personal matters that the public can easily understand, that some of us have long seen on policy issues, from global warming to the war in Iraq. On budget matters, which is where I came in, serious analysts now take administration dishonesty for granted.

It wasn't always that way. Three years ago, those of us who accused the administration of cooking the budget books were ourselves accused, by moderates as well as by Bush loyalists, of being "shrill." These days the coalition of the shrill has widened to include almost every independent budget expert.

For example, back in February the Center on Budget and Policy Priorities accused the Bush administration of, in effect, playing three-card monte with budget forecasts. It pointed out that the administration's deficit forecast was far above those of independent analysts, and suggested that this exaggeration was deliberate.

"Overstating the 2004 deficit," the center wrote, "could allow the president to announce significant 'progress' on the deficit in late October - shortly before Election Day - when the Treasury Department announces the final figures."

Was this a wild accusation from a liberal think tank? No, it's conventional wisdom among experts. Two months ago Stanley Collender, a respected nonpartisan analyst, warned: "At some point over the next few weeks, the Office of Management and Budget will release the administration's midsession budget review and try to convince everyone the federal deficit is falling. Don't believe them."

He went on to echo the center's analysis. The administration's standard procedure, he said, is to initially issue an unrealistically high deficit forecast, which is "politically motivated or just plain bad." Then, when the actual number comes in below the forecast, officials declare that the deficit is falling, even though it's higher than the previous year's deficit.

Goldman Sachs says the same. Last month one of its analysts wrote that "the Office of Management and Budget has perfected the art of underpromising and overperforming 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."

In other words, many reputable analysts think that the Bush administration routinely fakes even its short-term budget forecasts for the purposes of political spin. And the fakery in its long-term forecasts is much worse.

The administration claims to have a plan to cut the deficit in half over the next five years. But even Bruce Bartlett, a longtime tax-cut advocate, points out that "projections showing deficits falling assume that Bush's tax cuts expire on schedule." But Mr. Bush wants those tax cuts made permanent. That is, the administration has a "plan" to reduce the deficit that depends on Congress's not passing its own legislation.

Sounding definitely shrill, Mr. Bartlett says that "anyone who thinks we can overcome our fiscal mess without higher taxes is in denial." Far from backing down on his tax cuts, however, Mr. Bush is proposing to push the budget much deeper into the red with privatization programs that purport to offer something for nothing.

As Newsweek's Allan Sloan writes, "The president didn't exactly burden us with details about paying for all this. It's great marketing: show your audience the goodies but not the price tag. It's like going to the supermarket, picking out your stuff and taking it home without stopping at the checkout line to pay. The bill? That will come later."

Longtime readers will remember that that's exactly what I said, shrilly, about Mr. Bush's proposals during the 2000 campaign. Once again, he's running on the claim that 2 - 1 = 4.

So what's the real plan? Some not usually shrill people think that Mr. Bush will simply refuse to face reality until it comes crashing in: Paul Volcker, the former Federal Reserve chairman, says there's a 75 percent chance of a financial crisis in the next five years.

Nobody knows what Mr. Bush would really do about taxes and spending in a second term. What we do know is that on this, as on many matters, he won't tell the truth.