The Administration announced last week that the federal deficit will reach a record $445 billion this year. Self-proclaimed “deficit gladiators” immediately threw garlands at their own feet, hailing the new numbers as proof of victory over budget busting deficits predicted earlier this year. The White House had earlier estimated a $521 billion budget gap, and the Congressional Budget Office had opined that the deficit would be about $477 billion. Viewed in that light, these new numbers are an improvement, but, lest they overvalue their accomplishment, we must whisper into the conqueror's ears: “So what?” The new deficit numbers are more than $700 billion worse than the administration projected for this year in its first budget from 2001.

The White House attributed this year's “improvement” to the collection of $82 billion more in revenue, reflecting stronger economic activity. This increased revenue was partially offset by $6 billion in increased spending for Medicare and Medicaid. The deficit number included $25 billion for Iraq and Afghanistan, but did not include $50-60 billion that we are expected to spend there next year. If the new projection is correct, this year's deficit will be about $75 billion more than the 2003 deficit.

More than anything else, long-standing structural budget deficits impact your future if you plan on having a mortgage, using Medicare, collecting Social Security, or making use of any of the other entitlements that hundred of millions of Americans rely on.

We also learned recently that the federal deficit is a threat to the world economy. The International Monetary Fund, which usually only issues its economic warnings to developing countries drowning in debt, put the United States on alert because the U.S. deficit is getting so big that it is crowding out private investment and driving interest rates up on a global level.

Instead of tackling this financial crisis head on, the administration is revving up its spin machine and playing a game of bait-and-switch designed to distract the public from realizing that this unhealthy diet of tax-cuts without significant spending cuts a one way ticket to budget busting street.

Make no mistake, the supposed improvement, from $521 billion down to $445 billion, is a result of the administration's initial forecast being unrealistically high.

The administration also needs to be careful when using budget projections to claim the deficit is shrinking when the numbers tell a different story. The initial fiscal year 2004 budget, released in February 2003, said that the deficit would be $307 billion, lowballing the federal deficit by $137 billion.

Spinning the numbers as “a sign of progress toward President Bush's goal of cutting the deficit in half in five years” may sound good in a press release, but the numbers don't add up. They fail to include known or likely costs, such as fixing the alternative minimum tax, funding efforts in Iraq, and paying for other announced defense spending.

A $445 billion deficit is still the biggest in dollar terms, and it looks even bigger when you take into account the social security surplus right now ($153 billion in 2003), which is masking the size of the federal deficit. Our elected officials can stop patting themselves on the back and congratulating each other for avoiding a massive deficit – the difference between an 80 foot tall gorilla and a 70 foot tall gorilla isn't going to save Hong Kong, and a scant $70 billion isn't going to save our budget when it's already hemorrhaging red ink.

Please don't believe this budget mumbo-jumbo. This is a record busting deficit and nothing anyone says will change that fact. Bringing the budget back into balance will take more than soundbites, it will take strong leadership and compromises on the part of the President and the Congress.