EDITORIAL: Declining deficit proves deceiving

The government’s budget deficit will drop by almost $100 billion this year — from $680 billion to $583 billion. The deficit is the lowest it’s been since President Obama took office, and $66 billion less than the administration predicted earlier this year when it released its budget.

“Under the president’s leadership,” said acting White House budget director Brian Deese, “the deficit has been cut by more than half as a share of the economy, representing the most rapid sustained deficit reduction since World War II, and it continues to fall.”

Yes, this is good thing, and it would be great if the numbers continued to move in this direction. But the administration’s boasting about these numbers is also a bit disingenuous when the overall state of the economy is considered.

One of the main contributors to the reduced deficit was the recent sequester and its associated budget cuts. President Obama signed the Budget Control Act in 2011 in order to end a debt ceiling standoff. The legislation guaranteed billions of dollars in automatic federal budget cuts if a congressional supercommittee failed to reach a bipartisan deal on spending reductions.

President Obama tried to pressure Republicans into raising taxes in order to avert those budget cuts, warning that they would “add hundreds of thousands of Americans to the unemployment rolls.” Democrats and Republicans alike echoed warnings of economic Armageddon. But, thankfully, the law wasn’t repealed and the sequester scare proved to be pure fiction. The Government Accountability Office determined that the $85.3 billion in spending cuts had resulted in the layoff of exactly one — one — employee across 23 federal agencies.

While the shrinking of the budget deficit is good and important news, it is less important than its relationship to the gross domestic product. When the deficit-to-GDP is taken into account, the data shows that the economy simply isn’t as strong under the Obama administration as it was under previous presidents. Bill Clinton ranks first, followed by George W. Bush, George H.W. Bush and Ronald Reagan in a virtual tie, and, finally, President Obama.

Add to this the fact that the White House has lowered its economic growth forecast from a 3.3 percent hike in GDP to a 2.6 increase — due to a 2.9 percent drop in GDP blamed on bad winter weather, a ridiculous excuse if there ever was one — and it’s clear that we are nowhere close to being out of the woods.

Far from the reduced deficit marking a new era of fiscal restraint and responsible government spending, we’re still adding half a trillion dollars to the national debt every year and doing absolutely nothing to address the unfunded liabilities of our various entitlement programs.

A reduced budget deficit is a fantastic thing. A healthier overall economy would be even better.