IN OCTOBER, having labored mightily, the president and Congress produced what was described as a major deficit-reduction agreement. Now come estimates that for the next two fiscal years the deficit will instead break all records and go up. The implication, strengthened by the history of the last 10 years and the vacillation that accompanied passage, is that the agreement -- a supposed $500 billion in deficit reduction over five years -- is a fraud.

In fact it isn't. The problem is not that the cuts are smaller or less substantial than advertised but that the deficit has always been larger. Earlier deficit estimates this year were egregiously low on two counts. They failed to take full account of the economy's evident weakness even before oil shock that accompanied the Iraqi invasion of Kuwait; they also systematically understated the up-front cost of the savings-and-loan bailout.

The Office of Management and Budget and other participants took the occasion of the budget agreement, when more attention was focused on the depth and the politics of the tax increases and spending cuts involved than on the short-term results they would achieve, to slip in higher estimates. The new figures are less fanciful than the old, but even they, as congressional budget director Robert Reischauer testified the other day, are likely under-estimates; the economy will likely be still weaker than they assume, and they leave out the costs, still uncertain, of Operation Desert Shield.

But that's not the fault of the budget agreement. However high the deficit turns out to be, without the agreement it would be still higher. The Bush administration, its predecessor and the Congresses they faced were warned repeatedly to reduce the deficit before recession struck. The argument was that recession would only compound the problem by moving the deficit to a higher plateau while making retrenchment harder to impose. The warning went unheeded; indeed, the opposite occurred. It was only when faced with the worsening fiscal prospect associated with recession (together with the costs of the savings-and-loan bailout) that the White House and Congress felt compelled to act.

But recessions don't last forever; neither do bailouts or military operations. Over the long run, as even the professionally skeptical Mr. Reischauer said the other day, if the president and Congress adhere to the budget agreement, the structural deficit now the bane of both economic and social policy will recede if not disappear. Perhaps then the country will be in position to make a fresh start.