WASHINGTON Critics fault Bush's plan to cut deficit

The latest budget year saw the largest deficit in U.S. history.
WASHINGTON (AP) -- President Bush's goal of halving this year's projected $500 billion deficit by 2009 distracts from the more serious crunch the government faces later as the huge baby boom generation ages, critics say.
"Is it achievable? Yes," said Robert Reischauer, former head of the nonpartisan Congressional Budget Office who is now president of the Urban Institute. "Is it likely to occur? No. Is it sustainable? Probably not, because the world turns worse" at the end of this decade.
That is when the 76 million baby boomers will begin drawing on Medicare and other costly income support programs, likely pushing federal deficits ever higher.
Cut in half
Administration officials say they want a deficit in 2009 that is half of this year's level, which White House budget chief Joshua Bolten has said he expects to hit $500 billion.
Achieving a $250 billion deficit in five years, however, could take hundreds of billions in savings, a difficult political task.
Bush will seek to cut the deficit in his $2.3 trillion budget request for 2005. He will send it to Congress in February, nine months from the presidential and congressional elections.
White House officials deny talk on Capitol Hill that they might define their goal as halving the deficit's percentage share of the U.S. economy in five years. This year's $500 billion deficit represents 4.4 percent of the economy. That would make their target 2009 deficit 2.2 percent of that year's economy, or about $320 billion, leaving their task $70 billion easier.
When the budget year ended Sept. 30, the deficit was $374 billion, the highest ever in dollar terms. Administration officials say a more important measure is how the shortfall compares with the size of economy, with last year's 3.5 percent share far below the 6 percent post-World War II peak of 1983.
"We can cut the deficit in half by 2009 by any number of standards, though we feel the deficit as a percentage of" the economy "is the most economically relevant measure," said White House budget office spokesman Chad Kolton.
Two strategies
White House officials say Bush will rely chiefly on two strategies. He will propose extending tax cuts that would otherwise expire, which they say will spur the economy, and seek to limit the growth of spending that Congress must approve each year, probably to 4 percent or less.
The goal is backed by many Republicans, at least as a starting point. But conservatives want a bolder move against the record deficits and big spending increases that the administration has run up.
"It's a rather anemic goal, actually," said Stephen Moore, president of the conservative Club for Growth. "We should be talking about how to balance the budget."
Democrats say that even if Bush achieves his objective, he would leave huge shortfalls because he has driven deficits so high. Bush took office when large surpluses were projected for the foreseeable future. But the forecast has since been dashed by recession, the costs of fighting terrorism and wars and tax cuts.
"Now that they've created the biggest deficits in American history, they say we'll have half a hole rather than a full hole, and they want credit for a victory," said Thomas Kahn, Democratic staff director of the House Budget Committee.
A $250 billion deficit would be the fifth highest on record in dollar terms. A $320 billion shortfall would be the second worst.
With projections that the economy will strengthen, deficits are expected to gradually improve after this year. The Congressional Budget Office projected in August that after peaking at $480 billion this year, the gap would drop to $170 billion by 2009 -- if new tax cuts are enacted and spending grows only at the rate of inflation.