BOTH PRESIDENTIAL candidates want you to think they have a serious plan to deal with the budget deficit. President Bush and Democratic nominee John F. Kerry each promise to cut it in half in the next several years. As the latest projections from the Congressional Budget Office show, there are two problems with these pledges: They're based on unrealistic assumptions, and -- even if they could be done -- they aim at the wrong target. Deficits in the following years would almost certainly head back up sharply, endangering the economy and hobbling the government's ability to address the country's needs. Dealing with deficits in the long term will take far more discipline than either candidate has demonstrated, in office or on the campaign trail.
First, the numbers. The CBO predicts a $422 billion deficit this year, a record in dollar terms but a tolerable 3.6 percent of gross domestic product, below the 6 percent peak reached in 1983. But the CBO figures show that under a conservative set of assumptions -- smaller but still continuing operations in Iraq and Afghanistan, the extension of tax cuts now slated to expire, adjustment of the alternative minimum tax so that it doesn't hit growing numbers of taxpayers, and increases in discretionary spending only to keep pace with inflation (meaning, far below the recent rate) -- the deficit in five years would still be in the neighborhood of $400 billion. In other words, don't count on it being cut in half, under either candidate.
The scary part is that this is the least of the deficit problems. The first of the baby boomers will begin to retire in 2008, and the costs of Social Security and, to an even greater extent, Medicare, will begin to rise dramatically. The CBO projects that spending on the two programs will nearly double over the next 10 years, consuming a growing share of the federal budget, and the trajectory will only get steeper from there.
Both candidates acknowledge this problem; neither has offered anything close to a realistic solution. Mr. Bush proposes allowing workers to set aside part of their Social Security payroll taxes in private accounts, a move that would entail huge costs as it is implemented. Having added an expensive entitlement program in the form of a Medicare prescription drug benefit, Mr. Bush offers no real plan to restrain Medicare costs. For his part, Mr. Kerry cavalierly promised about Social Security: "I will not cut benefits." That may help him get elected; it won't help him govern. Mr. Kerry's plans for Medicare are as gauzy and inadequate as the president's.
That's not to say the two candidates are equally reckless. Mr. Bush, with his relentless push for ever more tax cuts, has proven his lack of seriousness about dealing with deficits. The stunning deterioration of the federal budget outlook during Mr. Bush's term is by no means mostly his fault; the economy faltered and the Sept. 11 attacks drove spending far higher than expected. But despite those changed circumstances, and the additional costs of prosecuting the war in Iraq, Mr. Bush pressed ahead with tax cuts that dug the hole deeper -- and he wants even more, at a far higher cost, if he is reelected. His prescription for reducing the deficit is to slash federal spending to a degree that neither Congress nor the public is likely to swallow. In addition to the cost of his Social Security plan, he has proposed an array of tax-preferred private savings accounts that over the long term would siphon off billions in government revenue.
Mr. Kerry would cut taxes less and spend more than Mr. Bush; the essence of his economic plan is to take the portion of the tax cuts that go to the wealthiest Americans and instead use the money to pay for health care and education. This is a wiser use of the funds, but it doesn't do much to deal with the deficit.
Where Mr. Kerry has the edge on the president is that he has endorsed real budget discipline measures. He would require Congress to find ways to pay not only for extra spending but for tax cuts as well, an equivalence that was a part of budget rules during the 1990s but that has been anathema to the Bush White House. Mr. Kerry pledges to trim back planned spending if it turns out to be unaffordable, a likely scenario since at least some of his savings are rather implausible. His economic advisers have a proven track record on deficit reduction.
Deficit hawks may be uneasy about Mr. Kerry. But they've got many more reasons -- 422 billion of them, really -- to fear four more years of Mr. Bush.
This is the first in a series of editorials comparing the records and programs of the presidential candidates on important issues.