The following editorial appeared in Sunday's Milwaukee Journal Sentinel:
If forecasting is the art of saying what will happen and then explaining why it didn't, the men and women who run the statistical factories in Washington and on Wall Street have a lot of explaining to do.
As the initial phase of the $1.35 trillion tax cut plan enacted in spring begins to show up in paychecks across America, they might explain how it is that the supporting foundation for the package - cumulative projected surpluses of $5.6 trillion through the end of the decade - suddenly turns out to be ... porous.
Actually, the latest numbers showing significantly smaller surpluses should be regarded as a blessing. The tax package was always too large, given the uncertainties of economic forecasting, and it should have been scaled back until the government had some real experience with surplus revenue after three decades of deficit spending. Some future Congress will have to go back to this legislation anyway, since its main provisions ... disappear on Jan. 1, 2011, which would mean a substantial tax increase unless Congress acted to undo the foolishness.
Now, Congress has the perfect excuse: It appears the projections will fall short of earlier targets - well short when surpluses from Social Security and Medicare are excluded from the totals, as President Bush and members of both parties in Congress have insisted they should be.
Take the current fiscal year. The Congressional Budget Office's January estimate of the government's operating accounts showed that revenue would exceed spending by $96 billion (not counting a Social Security surplus of $156 billion and a Medicare surplus of $28 billion). In June, the number had imploded to $16 billion. For the four years ending Sept. 30, 2004, a cumulative surplus of $489 billion had been revised downward to $127 billion.
What to do? The president and Congress could always agree to cut expenditures ... or ... go to bended knee and exhort a higher authority than Alan Greenspan to end the go-slow economy with a burst of fresh, revenue-generating growth.
It might be easier to revisit the tax bill. Because the legislation was structured so that most of the tax benefits do not kick in until the latter years, it would be relatively simple to shave the numbers and sweat down the total size of the package, starting with, say, the 2003 calendar year. That way, no one could accuse the tinkerers of jeopardizing any fiscal stimulus intended for this year or 2002.
After that, it's unlikely most voters would be nonplused by a partial recision of a tax cut they had yet to receive - and, truth to tell, had not demanded in the first place.