Bushie Admits Tax Cut Caused Deficit!

Harsh reprisal to follow?

A-woo-ga! A-woo-ga! Secure the perimeter! The White House budget office has been caught off-message!

The Bush talking point on the present budget deficit is that it was not caused by tax cuts. To be sure, White House budget chief Mitch Daniels has conceded that the budget will remain in deficit for the next decade. But he has never spoken out loud the words, “Our 2001 tax cut helped create the present deficit.” Here is how a Feb. 3 White House fact sheet lays down the Bush line:

The budget would be in double digit deficit if had there never been a tax cut in 2001. The budget returned to deficit because of war, recession and emergencies associated with the terrorist attacks of September 11th.

Osama Bin Laden created the deficit by knocking down the World Trade Center. Bill Clinton created the deficit by bequeathing Bush a spent boom. But no way did Bush create the deficit by cutting taxes. Without the stimulus provided by the 2001 tax cut, the deficit would be much bigger.

But whoever wrote the historical tables volume of the 2004 White House budget obviously didn’t get the memo. Observe this passage from the bottom of Page 5:

An economic slowdown began in 2001 and was exacerbated by the terrorists’ attacks of September 11, 2001. The deterioration in the performance of the economy together with income tax relief provided to help offset the economic slowdown and additional spending in response to the terrorist attacks produced a drop in the surplus to $127.1 billion (1.3% of GDP) and a return to deficits ($157.8 billion, 1.5% of GDP) in 2002 [all italics Chatterbox’s].

According to this analysis, the 2001 tax bill was intended to help stimulate the economy. But it didn’t work, or at least didn’t work fast enough. Consequently, the Bush tax cut combined with a weakening economy and the Sept. 11 attacks to eliminate the surplus and create a $157.8 billion deficit. You can say that a deficit representing 1.5 percent of the Gross Domestic Product doesn’t matter. You can say that short-term deficit spending will help stimulate the economy in the long run. But the person who wrote this obviously couldn’t bring himself to deny that the tax cut helped create the current deficit. Chatterbox wonders if he’ll still have a job next week.