- The Washington Times - Friday, February 14, 2003

The hysteria that Democrats have displayed in response to President Bush's 2004 budget has been out of proportion to the relative impact of the fiscal blueprint's major elements. This is true both in terms of the size of the 2004 budget deficit which is projected to be $307 billion and regarding the proposed tax cut which the administration calculates to be $359 billion from fiscal 2004 through fiscal 2008 and $670 billion over 10 years.
Nevertheless, Senate Minority Leader Tom Daschle called the administration's 2004 fiscal plan "a budget-busting epic disaster." And Rep. John Spratt of South Carolina, the ranking Democrat on the House Budget Committee, called the president's 2004 proposal "the most fiscally damaging budget in U.S. history." Will someone please pass these boys the smelling salts? And the historic record.
Reference is made to the tables below. Table 1 compares the 2004 deficit with the budget deficits incurred in comparable post-recession years. Measured as a percent of gross domestic product (GDP), which represents the economy's total output, the 2004 deficit (2.7 percent of GDP) is significantly smaller than the other deficits incurred in recent years at comparable stages of the business cycle. Moreover, if Messrs. Daschle and Spratt apply the relative magnitudes of the deficits of 1992, 1983 and 1976 to the size of 2004's projected GDP, they will confirm that those earlier deficits dwarf the 2004 deficit despite the fact that the 2004 figure admittedly is the largest nominal deficit in history.
Concerning the president's tax-relief plan, Table 2 reveals that the overall impact on total budget revenues from 2004 through 2008 (3.1 percent) is hardly excessive. As a percent of GDP, the tax cuts peak in fiscal 2004 at 1 percent and total a mere 0.6 percent of GDP through 2008.
The main problem with Mr. Bush's tax cut is that too little of it (a mere $31 billion) is scheduled to become effective in the current fiscal year, which ends Sept. 30. Now is when economic stimulus is needed the most. If Messrs. Daschle and Spratt truly want to play a fiscally useful role, they will petition the president to front-load more relief from his otherwise well-considered tax cut into 2003.

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