Deficit-cutting plan implausible

President George W. Bush is unlikely to deliver the fiscal belt-tightening he promised because his plan omits major costs, like the military operations in Iraq and Afghanistan, and relies on a degree of austerity that may prove elusive, analysts said.

According to Mr Bush's fiscal 2006 budget proposal, the US budget gap would swell to a record $427 billion but shrink steadily over the following five years to about $207 billion in 2010.

Apart from the military spending in Afghanistan and Iraq, the Bush plan also excludes a pricey fix to ensure a growing segment of the middle class does not get snared by a tax provision meant to catch the wealthy.

And it fails to factor in the cost of making permanent tax cuts that Mr Bush has put in place as well as the trillions of dollars in borrowing that would be needed to fund a transition to private Social Security accounts.

Critics charged that the White House's claim that Mr Bush would meet his goal of halving the budget gap by 2008 - a year earlier than pledged - was inflated.

"The problem with the budget is not so much what's in it but what's left out of it," said Robert Bixby, head of the bipartisan Concord Coalition. "I don't think it's a credible proposal to cut the deficit in half."

His group has warned of deficits totaling $5.8 trillion over the coming decade unless the United States changes its fiscal course.

Under Mr Bush's plan, discretionary domestic spending outside of defense and homeland security would fall by 0.7 per cent in the coming budget year and then hold steady through 2009, which means it would keep shrinking in inflation-adjusted terms.

William Niskanen, chairman of the libertarian Cato Institute, questioned whether Mr Bush, who has never vetoed a spending bill, would be able to hold that line.

"That's only 17 per cent of the total budget and it's the part of the budget that has more politics per dollar in it," he said. "It takes a very large expenditure of political capital to keep that budget tight."

As Stan Collender, Washington manager for communications firm Financial Dynamics, put it: "You've got a Republican Congress that is more worried about its own re-election than the president's legacy."

Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said Mr Bush might prefer to spend his political capital battling to revamp Social Security and the tax code. "I think there are priorities on his list that are higher than deficit reduction," she said.

Brian Riedl, a budget analyst at the conservative Heritage Foundation, said even if Mr Bush managed to win the myriad budget cuts his plan envisions, he would still need to rein in mandatory spending for programmes such as Social Security and Medicare to meet his deficit goal.

Analysts also said the White House had masked the cost of a plan to make permanent Mr Bush's tax cuts, which are due to expire by the end of the decade, by looking at deficits only over a five-year window.

The administration said the tax proposal would cut revenues by just $53 billion over the coming five years, but pegged the 10-year cost at $1.1 trillion. Congressional forecasters have put the 10-year total at $1.7 trillion.

In addition, the White House did not include the revenue that would vanish if workers were allowed to divert part of their Social Security payroll taxes to private accounts.

Administration officials have said the plan would cost $754 billion over 10 years but acknowledged the total cost would climb into the trillions before savings from a slower pace of benefit growth began to recoup that money.

"Outside of the budget window, the fiscal situation deteriorates an an incredibly rapid pace," Ms MacGuineas said.