LIES:

FACTS:

#1  In 2000 and 2001 Bush promised that Social Security Funds would remain in a lockbox and that "we can proceed with tax relief without fear of budget deficits even if the economy softens" since his budget projections are "cautious and conservative". 

This is a classic case of The Big Lie and fuzzy math.  The simple truth is that, due to Bush's $1.35 trillion giveaway, a $236 billion budget surplus has been wasted and we face a projected record deficit of $307 billion in 2004.  Bush's 2004 budget will increase the national debt by $2-3 trillion and require that the government use the entire Social Security surplus to fund its deficits.  (1)

 #2    President Bush claimed that he requested his 2001 tax cuts because of the recession.

Bush's 2001 tax cuts are virtually identical to the tax package he campaigned on for more than a year during the end of the Clinton boom.  (11)

 #3  As the budget deficit emerged, Bush assured us that the deficits would be "small and temporary" while repeatedly claiming that during the 2000 campaign he said he would allow the federal budget to go into deficit in times of war, recession or national emergency, but never imagined he would have a "trifecta".  When asked to identify when this occurred, the Bush administration claims it was during a 2000 Chicago campaign stop.

Bush never made such a statement in Chicago nor anywhere else during the 2000 campaign.  In fact, these three caveats on deficits were stated on several occasions by Vice President Gore.  (2)

Bush's attempt to pin the deficit on the war also is a misstatement, since the cost of the Bush tax cuts is three times the cost of the response to 9-11 and the wars in Afghanistan and Iraq.  (2)

#4 Faced with growing deficits, President Bush and Glenn Hubbard, the chairman of the President's Council of Economic Advisors, now claim that deficits do not matter and have no impact on interest rates.

As recent as 2002 the President said, "I'm mindful of what overspending can mean to interest rates or expectations of interest rates."  As for Hubbard, the 2002 edition of his textbook "Money, the Financial System and the Economy" not only states that higher deficits increase interest rates but also provides a formula to calculate the increase in interest rates per dollar increase in spending or tax cuts. 

In fact, in July 2003 interest rates on 10-year U.S. Treasuries jumped from 3.1% to almost 4%.  Leading Treasury Secretary Snow to call the deficit "worrisome" and express concern that federal borrowing would crowd out private investment. 

The International Monetary Fund concluded that Bush's fiscal policies "will make it more difficult to cope with the aging of the baby boom generation and will eventually crowd out investment and erode US productivity growth"; and called for the US to put in place a "credible fiscal framework" with the objective of balancing the budget.  (3)

#5 In 2003, Bush offers a "stimulus package" that calls for $670 billion in additional tax cuts.  Vice President Cheney argues the tax cuts are necessary to prevent a double dip recession.

Even the Bush friendly Economist rejects the notion that the $670 billion Bush plan is a "stimulus package."  "Even by the Bush team's own numbers, this is not an efficient short-term stimulus package: it pumps only around $100 billion of the tax cuts into the economy over the next year.  And most of the money goes to richer Americans, whom economists reckon are less likely to spend the additional cash than poorer ones."  (4)

(UPDATED!) #6 Both Bush and Ari Fleischer proclaimed that a report by Blue-Chip economist concluded that the economy would grow by 3.3 percent in 2003 if the President's tax proposals were adopted.

Bush also claimed that the tax cuts would create 344,000 new jobs per month and that it would result in increased incomes and living standards "for American workers".

No such report exists. (5)

As of September 30, 2003, there has only been a net gain of 57,000 jobs since the 2003 tax cuts became effective, while the economy lost a net of 2.75 million jobs since passage of the 2001 tax cuts.  In addition, real wages have declined 1.2% on Bush's watch.  (10)

#7 Bush and the Republicans claim that the 2003 tax cut proposal benefits all Americans and that ninety-two million Americans will receive an average of almost $1,100.

(UPDATED!)
 #8 The 2003 tax cuts will help reduce the deficit because the resulting economic growth will offset tax losses.

When the deficit for FYE 2003 was reported below projections at $374 billion, White House aides claimed that the deficit was on a "downward path."

Nearly one-third (31%) of all taxpayers, would receive nothing and 64 million taxpayers (nearly half [48%]) would get less than $100.  The average taxpayer (i.e., taxpayers in the middle fifth 20%) would only get $289 under this proposal.  In contrast, the top 1% of taxpayers would get $30,127 while those earning more than $1 million would get according nearly $90,200.(6)

The Congressional Budget Office (headed by a former Bush White House supply-sider) found that even under the more favorable "dynamic scoring" methodology the tax cuts would result in more than $1 trillion in deficits over the next five years alone and that the economic stimulus claims asserted by the White House were "not obvious." 

The Comptroller General found the administration's claim that the tax cuts would help reduce the federal deficit to be "flat false."  In order to balance the budget by 2013, the government would have to either (i) raise income taxes by 27 percent and cutting social security spending by 60 percent and defense spending by 73 percent or (ii) cutting all programs except for defense, homeland security, social security and Medicare by 40 percent.

The Congressional Joint Committee on Taxation found that the tax cuts would have minimal effects initially and then the positive effects "are eventually likely to be outweighed by a reduction in national savings due to increasing federal deficits."  The Committee also predicted job growth of between 230,000 to 90,000 jobs during the first five years, with no growth or job losses in the next five years. (7) 

The $374 billion deficit does not include $87 billion for Iraq, $400 million for Medicare, $500 billion for increased defense spending and $1.8 trillion to make the "temporary" tax cuts permanent.  (9)

#9 The Bush administration repeatedly low-balled budget projections in order to persuade Congress to pass its tax cuts in 2001 and 2003.  The Bush administration's projection for FYE 2003 have been as follows:

April 2001: $334 billion surplus
Feb. 2002:  $80 billion deficit
Feb. 2003:  $304 billion deficit

In July 2003, the Bush administration announced that the deficit will reach $455 billion for FYE 2003.  Without the Bush tax cuts, however, the deficit would be $278 billion.  By 2011, these tax cuts will have cost $3.7 trillion.

The $455 billion estimate is deceptive, however, since (i) it does not even include the costs of U.S. operations in Iraq and Afghanistan which exceed $4 billion per month; but (ii) it does include the Social Security surplus.  Without the Social Security surplus, the deficit would total $614 billion plus the costs of the Iraq and Afghanistan operations.  (8)

 #10   On April 24, 2003, Bush campaigned to make permanent all aspects of his 2001 tax plan stating that while Congress adopted his plan "the problem is they responded with a phased-in program.  They said tax relief was important and tax relief should be robust, but they phased it in over a number of years - three years in some cases, five years in others and seven years.  Listen, all I'm asking Congress to do is to take the tax relief package they've already passed, accelerate it to this year so that we can get this economy started and people can find work."

President Bush requested that the tax cuts be phased in over five year, both when he first offered the plan in 1999 and when he submitted it to Congress in February 2001, in order to minimize the total costs of the tax cuts.  In essence, Bush sold a discounted version of his plan for political reasons, but now wants Americans to pay full price.  (11)

Caught on Film: The Bush Credibility Gap

In addition, in February 2003 Congressional Democrats began to press this case, launching a campaign on the Bush "credibility gap" on budget matters.

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