by Calculated Risk on 5/04/2005 12:39:00 AM

Ignorance is curable. It just takes experience and education. But what can we do when the Chairman of the Senate Budget Committee ignorantly proclaims that "we are tackling the problem of federal spending"? Laugh? Cry?

Today Senator Judd Gregg (R-NH) made that outrageous and specious claim. In a commentary in the New Hampshire Union Leader, Gregg claimed "For the first time in nearly a decade, the budget forces meaningful savings in mandatory government programs, which are driving out-of-control, long-term deficits."

Nonsense. What is driving out-of-control structural deficits is the significant drop-off in tax revenue from the Bush tax shifts.

UPDATE: Correct Y axis on Graph.


Click on graph for larger image.

The chart depicts Federal Government income and outlays as a % of GDP. "Income" does not include the surpluses for the various trust funds. A steady combination of spending restraint and tax increases brought the budget into balance at the end of the ‘90s. The primary cause of the current budget deficits is the significant decrease in tax revenues, as a % of GDP, due to the Bush tax shifts.

Gregg seems to believe that the fiscal 2006 budget will reduce the deficit. That is also not true. The $106 billion in additional tax cuts for high income earners exceeded the cuts in programs for the poor, meaning the fiscal 2006 budget deficit will set another dubious record.

Mr. Gregg continues: "First, we must tackle the short-term deficit, ..." Although Gregg predictably misunderstands the causes of the deficits, I agree the short term deficit is the top fiscal issue facing America. Not Social Security. But this budget does nothing about the deficit ...

And finally Gregg wrote:

[The budget] maintains job-creating tax policy that has resulted in the fastest-growing economy since 1999 ...

Absolute nonsense. The tax policy was not targeted at job creation. In fact, despite Gregg's implication, this recovery has seen the weakest job creation of any recovery since the Great Depression.

If Gregg was a writer for NRO, I would just chuckle. But he is the Chairman of the Senate Budget Committee. Ignorance and power are a poor combination.