The buck speeds by

It was fitting that President Bush chose Independence, Mo., as the place to take a stand in defense of fiscal prudence. Independence is, of course, the hometown of Harry S. Truman, the famously blunt president who defined the Oval Office as the place where the buck stops.

It was a strong speech Mr. Bush gave last week, in which he challenged Congress to exercise restraint when it returns to work after Labor Day and takes up the 13 appropriations bills that run the government, and urged all Americans to join him as watchdogs to that end. It is unfortunate that the Rottweiler-in-chief wasn’t on duty a week earlier when he gleefully signed into law a $5.5 billion “emergency” agriculture bailout more laden with pork than an Iowa hog farm, but prudence late is better than never.

It is even more unfortunate that the president took such an aggressive tone precisely at the time when the search for a rational solution to the problem of how to combine a shrinking surplus with a long-range tax cut and promises of increased spending on education, defense and health care threatens to degrade into the very “gamesmanship, standoffs and government shutdowns” Mr. Bush eschewed in his speech.

Of the three elements of the problem, the shrinking surplus is the most vexing. The day after the president spoke in Independence, the Office of Management and Budget issued new estimates showing that the federal surplus, the foundation upon which the tax cut and spending proposals stand, will be $158 billion at the end of September, sharply down from the administration’s estimate of $281 billion. It is pointless to argue how much of this drop is due to lower tax payments in a slumping economy and how much is due to those components of the tax cut already implemented, such as the rebate checks now going out. Naturally, this is what the president and Congress has chosen to argue about.

Through some very creative accounting in the Social Security and Medicare trust accounts, the administration and its supporters in Congress bought – or borrowed – a little time in their quest to simultaneously reduce taxes and spend more on pet projects. But this shuffling adds only a few billion to what, at the end of the 10-year tax cut, will be a trillion-dollar hole. Both parties have properly pledged to use these trust funds only to reduce debt, not for government operations, but unless the other elements change drastically, that pledge will have to be broken. The only question is who gets the blame.

This train wreck in the making can be avoided only if both parties decide to level with the public. Democrats could start by ending their incessant attacks upon the tax cut – if, as they say, it is solely responsible for the shrinking surplus, they are partly responsible both for voting for it and for insisting it include the instant rebate program.

The president and his party have every right to take a more optimistic view of the economy, but they have no right to be silly about it. Short term, the White House says the economy will grow by 3.2 percent in 2002. Three separate, highly credible surveys of leading analysts at major investment banks puts it a good half-point lower. Long term, the only place the White House’s claim is still believed that the tax cut will cost $1.3 trillion over 10 years and not the true number of $2.5 trillion is the White House itself. And that assumes that Congress will do nothing about the alternative minimum tax that threatens to chew through the middle class by the end of the decade, that everyone forgets about the president’s promised $190 billion prescription drug benefit and his Social Security investment accounts, and that Russia not only drops its opposition to the $100-billion missile defense shield but also agrees to build it for us.

Independence has been a favorite venue for feisty presidential speeches going back to days of LBJ. As Mr. Bush continues to break up his vacation with speaking engagements throughout the Heartland, he should consider a town in New Mexico for his next stop. It’s called Truth or Consequences.