By spending Social Security surphus, Bush hides depth of deficit.

Today Presten: Sush; puts the mear on his promise of a budget that it the first time in four years shows red ink at the bottom. Eac As he noted in his State of the Urach adCress Last week, deflat are needed for now to the war on terrorism, protect the homeland and boost the economy: But, Bush promsed, the retura to deficit spending will bes and short-term

Don't believe that for a moment. Even be fore the cfcal numbers are released cor thing is des. The deficits will be big and will last for nearly a decade. Only by resorting to accountex gamenicks that would mer E7ron bash can Busb clam otherwise

According the non-partisan Congres Seed Barber Office, which released in but

projections in late January the defin next your will be close to $200 billion; the SOVETMEK Won't see another surps una 2010. By 2012 the government well will be carrying $1.3 trilica in debe

And dars before counting any of the new and sepave spending programs the adminstraren has dready said it plans to offer, or what Congress surely will add Arong the tems on Buts with list for next year

A 545-billion hike in defense spending the biggest crease in tau decades. ►A $90-talon economic-stimulus pack age

A record $273 babos for the National Inscrites of Hedri, an increase of nearly 16%

Then there's the laundry Est of new tax credits for health insurance, a expanded national service program, more money for veterans' health and a Medicare prescrip thon-ding benefit. Overall, Bush plantro hike pending by abou:

To make the deficits bank smaller, Bush has inded the $178-a surps that Soda Security wil rua next year, and the heathy Smoon will amass during the flowing

That's good there-term peltics, making Gen Pugh of this extra spending on top of the oversized tax cur enacted last

Deficit likely to finger

Without wing Social Security surpinses
tomast the defect baros bege and stays
kind. And that's asurang Cangas does
add my new spending or tex G
Defeit

your costs the rationis fiscal future

e

But in the long term, it amcants to a dis trous shit away from protecting the nation's financial security

Remember that right up und Sexu II. Bush and just about everyone rise in Westington were pledging to keep Social Security surpises on-units to tax cutter and yest thrifts. And for good reason

Left aspent the surpluses go toward paying down the federal governments

kuin veta. That wand help as inse rates, book economic growth and free up money to reform Social Securay and Mockcare before baby boomers start rearing

The focus on preserving Social Security surpluses also had a less divinex, but itically important, bene. It acted as a powetfi break an would-be tax cuters and big spenders. Anybody who wanted to prope a break or create a program had to do so without using the Socal Security steples

With that regulator pone the spending machine will almost certainly careen out of control. Producing a surplz real or fictional will be even more divi

Beth is right that the tide of a recession isotme to raise taxes of our spring to ta arplus gual But with the recesse showing signs of abaring he seedste packs how he ples to get the rayon back on track to paying of the deb

They said of the return to deficit spending that the President claimed would be small and short-term-their response was: "Don't believe that for a moment. Even before the official numbers are released, one thing is clear-the deficits will be big and last for nearly a decade. Only by resorting to accounting gimmicks that would make Enron blush can Bush claim otherwise."

They go on to report that "To make the deficits look smaller, Bush has included a $178 billion Social Security surplus next year, and the nearly $1 trillion of Social Security surpluses during the following 9 years. They say that is good short-term politics, making it seem as though all of this extra spending, on top of the oversize tax cut enacted last year, cost the Nation's fiscal future little."

But they say that "In the long term, it amounts to a disastrous shift away from protecting the Nation's fiscal and financial security."

They conclude by saying: "Remember that right up until September 11, Bush and just about everyone else in Washington were pledging to keep Social Security surpluses off-limits to tax-cutters and spendthrifts, and for good reason. Left unspent, these surpluses go toward paying down the Federal Government's debt. That would help cut interest rates, boost economic growth, and free up money to reform Social Security and Medicare."

What they are talking about is what we see. We do not see deficits as the President asserted, being short-term and small. What we see is an ocean of red ink. What we see is deficits right through the decade. What we see is the use of Social Security and Medicare Trust Fund money by over $2 trillion to fund tax cuts and other spending.

A Return to an Era of Deficits
(Deficits Without Social Security and Medicare, FY 1992-2005)

Let me just put up what the President said last year with respect to protecting the surplus. The President said: "To make sure the retirement savings of America's seniors are not diverted to any other program, my budget protects all $2.6 trillion of the Social Security surplus for Social Security and for Social Security alone."

President Bush on
Protecting Surplus

Now we see that that statement was in error. If we look at the next chart, which shows the percentage of Social Security Trust Fund surpluses being used for other Government spending, we see that in the bad, old days, we were using Social Security Trust Fund money for other purposes. That was dramatically reduced in the 1998 budget. We stopped using Social Security Trust Fund money for other purposes in both 1999 and 2000. In 2001, we started going back the other way, and under the President's plan, in 2002, 2003, and 2004, 100 percent of the Social Security surplus is being used for other purposes.

Last year, Director Daniels, you said in a news broadcast on Late Edition that "having protected and set aside money for the needs of the country, having protected every penny of Social Security for Social Security, having spent every penny of Medicare receipts on Medicare, having set aside $1 trillion for new needs or contingencies, there is still $1.6 trillion that the taxpayers are entitled to."

Well, again, what we see in light of this new budget is that you have not protected Social Security or Medicare. Instead what this budget reveals is that you are taking $2.2 trillion of Social Security and Medicare surpluses and using them to pay for tax cuts and other expenditures-something the President pledged not to do.