Surplus of Spin
W. should not allow his priorities to be vanquished.

By NR Editors
From the September 17, 2001, issue of National Review

udget estimators in both the White House and Congress agree that this year the federal government is likely to run a surplus north of $150 billion. All this money will be used to pay down the national debt. In Washington, this seemingly happy state of affairs is held to be a major problem for the Bush administration. The reason: Almost all of that surplus is payroll-tax revenue generated by Social Security. It is possible that by the end of the fiscal year, Social Security will be all that is keeping the federal government in the black. So Democrats are charging that President Bush is "raiding" Social Security and that he is doing so because his tax cut has bankrupted the rest of the government.

The White House has offered several responses to this argument: 1) The economic slowdown has done more to shrink the surplus than the tax cut. 2) The component of the tax cut that has done the most to shrink the surplus is the tax rebate on which Democrats insisted. 3) The tax cut was supposed to shrink the surplus in order to keep the federal government from spending all the money. 4) Spending remains the real threat: In fact, spending increases that Congress legislated last December cut the surplus even more than the economic slowdown has. 5) The surplus remains the second-highest in history.

Bush is trying to have it both ways on the rebates, claiming credit for the checks going out to taxpayers but not taking responsibility for their cost. Otherwise, these are all good points. They do not, however, solve his political problem. The president pledged to "protect" the Social Security surplus, that is, to use none of it to cover spending on other programs. It was an ill-considered pledge: It commits the federal government to keep overtaxing the country — by $150 billion this year, and more later — to pay down debt. That debt paydown does very little to benefit future Social Security beneficiaries. The money could be better used to improve our military or to finance tax cuts that would promote growth. And if revenues prove disappointing, the pledge will be difficult, if not impossible, to keep.

President Bush can try to keep the pledge by vetoing spending bills. But the White House has already all but conceded the emptiness of the pledge. By trumpeting the fact that the total surplus remains high, his aides implicitly suggest that it is pointless to treat the finances of one program as separate from those of the rest of the government. The president should not allow his priorities to be vanquished by an accounting fiction.