The White House announced late yesterday that the federal government ran a $159 billion deficit in the fiscal year that ended on September 30 (the national debt, remember, increased by $420 billion). The brief era of surpluses, as long expected, is now officially over.
Here's the news, though. White House Office of Management and Budget Director Mitch Daniels actually uttered a fiscal truth yesterday. The Washington Post's Dana Milbank quotes him:
"It's now clear that the unexpected surge in revenues toward the end of the last decade was temporary, and that revenues are returning to historic levels for reasons unrelated to legislated changes," he said in a statement. "At the same time, unexpected new defense and homeland security spending is needed to protect America from new threats."Daniels is right. The "surge in revenues" was temporary.
But the White House used that temporary surge in revenues to justify its 10-year tax cut package. Granted, few people were pessimistic at the time. But now we know that the fiscal good times are over.
So, can we now expect the "political adults" in the White House to follow their budget director's logic and seek to review -- and repeal -- the tax cut package that was based on unrealistic assumptions that have proven false?
Of course not. In fact, you can expect the White House to continue to push for making the tax cut package permanent.
That plan, of course, violates one of the most fundamental rules of politics and life: "If you find yourself in a hole, the first thing to do is stop digging."
I hope we can find some way to take away the White House's fiscal shovels.
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