Deficit Deceit

By INVESTOR'S BUSINESS DAILY

Fiscal Policy: What do you do when you have bad news that could affect what you're doing? Why, delay it, of course. Which is exactly what the White House is doing right now with the midsession budget estimate.

Each year, a revised budget estimate is put out in July. The idea is to catch up with fiscal changes that have been made since the last budget forecast six months earlier.

This year, of course, there have been massive — not too strong a word — changes in the spending outlook. That's not just our opinion. It's based on preliminary data from the Congressional Budget Office, budget analysts and think tanks of all ideological stripes.

But instead of issuing the July outlook as planned, the White House has postponed it until mid-August. Why? President Obama has made clear he wants major health care reform and, if possible, a global warming bill from Congress before it recesses in August.

But as the costly details of these bills become known, average Americans are coming to realize they'll be on the hook for trillions of dollars of new spending that will do little to improve either health care or the amount of CO2 in the air.

With the popularity of the White House and Democrats in Congress plummeting, generic congressional preference polls now show Republicans leading Democrats. So for the latter, it's now or never. They're afraid voters will reject these expensive programs. And they're right.

What's shocking isn't that the White House would put off the July budget estimate until August — so no one can see how bad our deficits really are — but that it's being done so openly. Recall that President Obama vowed when he took office that "transparency will be the touchstone of my administration."

Unfortunately, the decision to put off the mid-summer budget update until August negates that. It is, frankly, deceptive and deeply dishonest. It's hiding bad news about worsening deficits and growing unemployment to get a big spending agenda through Congress.

Recall that earlier deficit estimates put the red ink through 2019 at $9.3 trillion — or nearly $1 trillion a year. But this year alone the deficit will be $1.8 trillion, and if brisk growth doesn't resume soon, future deficits will be far greater than estimated.

As it is, even with the administration's highly bullish GDP growth estimates of more than 4% for 2011, 2012 and 2013, the deficit never drops below $600 billion in the next decade.

So, how bad could it get? Take just one program as an example.

According to congressional testimony scheduled for Tuesday from Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP), we have a monster on our hands.

TARP, begun as a "modest" $700 billion program to buy up bad mortgages, has morphed into a Hydra-headed 12 programs wrapped up in one, with $3 trillion in government commitments.

But here's the bombshell: According to Barofsky's prepared comments, which IBD obtained Monday, total efforts to "stabilize and support the financial system" since 2007 could eventually "reach up to $23.7 trillion." Such numbers are, in a word, stunning.

Add to this the $1 trillion-plus planned for health care reform over the next 10 years and the $1 trillion to $3 trillion cost for cap-and-trade, and you can see the deficits will be enormous, pervasive and permanent — requiring unparalleled tax hikes.

Eventually, the total take by government at all levels will be well over 50% of GDP — enough to sink the U.S. economy into a state of semi-permanent stagnation, a socialist stupor.

Good governance begins with honesty. Unfortunately, the Democrats' plans to expand the scope and reach of government to nearly every part of Americans' lives have been marked by fiscal deception and budget chicanery. The American people deserve better.