Here go the economic okey-doke.

Tax Receipts Exceed Treasury Predictions
Early Surge Lowers Deficit Projections
By Jonathan Weisman
Washington Post Staff Writer
Thursday, May 5, 2005; Page E01

After three years of rising federal budget deficits, a surge of April tax receipts brought unexpected good news to fiscal policymakers -- the tide of government red ink appears to be receding.

The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September.

Lest we forget:

MISOVERESTIMATE.  Say what? How does the idea of the deficit getting $70 billion bigger translate into fiscal success? It's easy, when you combine Washington's bizarre budget accounting rules, the increasingly superheated campaign season, and some Orwellian rhetoric. You see, last February, President Bush projected the deficit for this year would hit $521 billion. Now, thanks to a growing economy, the Bushies figure it will come in $76 billion below that number. Thus, we have a whole new way to game the budget debate: Overestimate deficits at the beginning of the year, come in below that forecast, and declare victory.

It's a pity that the real world isn't that rosy. Look more closely at the Bush numbers and you'll see that spending from '03 to '04 is up by a staggering $160 billion. Only $14 billion of that can be attributed to homeland security and Pentagon spending, including the war in Iraq. The rest is scattered throughout government, with much of it in programs such as Medicare, Medicaid, and Social Security.

The deficit would have been even bigger, except that a growing economy is boosting tax revenues across the board from last year. Individual income tax receipts are expected to be up by $23 billion, corporate taxes up by a whopping $50 billion -- thanks to higher profits -- and Social Security and Medicare payroll taxes up by $18 billion. Those Social Security taxes, of course, are not saved to pay retirement benefits. They are spent on the rest of government.

THE REAL NUMBERS.  And what about Bush's promise to cut the deficit in half in five years? The new Bush budget claims he can do it even faster -- by 2007. But don't hold your breath. That happy prediction assumes the U.S. will spend no more money on Iraq and Afghanistan after Sept. 30. And it ignores the need to fix the dreaded alternative minimum tax (AMT). Without a fix, the levy will hit more than 30 million taxpayers by the end of the decade.

The reality is that protecting millions of middle-class taxpayers from the AMT would cost close to $50 billion a year over the next decade. Once Washington fixes the AMT and pays for the war in Iraq, you can add at least $100 billion a year to Bush's deficit estimates over the next five years. That means forgetting about all that cutting-the-deficit-in-half business.

And lest ye think Bush forgot:

George W. Bush has a plan to cut the deficit. It's called cooking the books.

By now it's well known how Bush turned the $127 billion surplus he inherited in 2001 into a historic $413 billion deficit by 2004. It's less known that Bush's economic advisors incorrectly predicted a considerably larger $521 billion shortfall last February. Amazingly, the White House is sticking with that imaginary number--instead of the actual $413 billion--so Bush can claim he's already cut the deficit by $100 billion. If the fictional $521 billion somehow falls to $260 billion, Bush can falsely claim he's cut the deficit by half, thus fulfilling his campaign pledge.

"I've been watching this more than 30 years, and I have never seen anything quite this egregious," Stanley Collender, senior vice president for the large international consulting firm Financial Dynamics, told The New York Times. "They are cutting the deficit from a number they never believed in the beginning."