SYNOPSIS: The fiscal debacle will hit the baby boomers only after Bush has left office

Call it a "Bush trillion." It's a sum that is either much more or much less than $1 trillion whichever is convenient but one that George W. Bush thinks he can get away with calling "a trillion dollars" in speeches.

During the campaign Mr. Bush, to emphasize his moderation, claimed that he was matching a trillion dollars in tax cuts with a trillion dollars of new spending. In fact he proposed less than half a trillion in new programs, and now he proposes no real increase in spending at all. The tax cut, on the other hand, turns out to be $1.6 trillion, except that it's really $2 trillion once you count the interest costs. And it will be $2.5 trillion if it is accelerated, something Mr. Bush has urged but not factored into his numbers, and if a major wrinkle involving the alternative minimum tax is ironed out.

Meanwhile Mr. Bush has come up with another trillion, this time his "trillion-dollar contingency fund." It comes as no surprise that the actual number in his budget is only a bit more than $800 billion. And more than half of that consists of funds that Medicare was supposed to be setting aside for the needs of an aging population. So maybe we also need to define a "Bush contingency," as in: "Gee, people might get older, and they might have medical expenses. We can't be sure but it could happen."

Which brings us to the question of identifying the victims.

For there will be victims. The latest line from tax-cut supporters is that this isn't really a big cut, that we can easily afford it. But if that were true, Mr. Bush would be able to justify his plans with honest accounting, and would be able to honor his own party's promises to protect the retirement trust funds. Yes, his cut is somewhat smaller as a share of G.D.P. than Ronald Reagan's. But Mr. Reagan's tax cut was a fiscal disaster, and would have been even worse had his irresponsibility not been partly offset by increases in the payroll tax that finances Social Security and Medicare.

So who will be hurt? First, of course, the usual suspects: the poor and near-poor, who, because they pay no income tax (though they pay quite a lot in other taxes), will get nothing from the tax cut but will bear the brunt of the spending austerity that the tax cut will force. And these victims include a third of the nation's children.

But there will be other victims: middle-income baby boomers.

We keep hearing about the "typical" family that will receive a $1,600 tax cut. Now it's true that under Mr. Bush's plan a median-income family of two adults and two children under the age of 17 would get a $1,600 cut starting in 2006. Most of that, however, comes not from lower tax rates but from an increased child credit. A couple whose children are grown (or even college-age) get only $600, a widow or widower gets only $300. So for middle-income baby boomers, there just isn't much of a tax break. (You can also start to see why 88 percent of families will get less than that "typical" $1,600 break, in most cases much less.)

Needless to say, there is no comparable fine print when it comes to tax cuts for the rich.

Meanwhile, Mr. Bush has made it clear that he intends to raid the funds that were supposed to support the baby boomers in their retirement. Social Security and Medicare were expected to accumulate almost $3 trillion in reserves over the next decade, reserves that were supposed to be there for the baby boomers. But Mr. Bush proposes to divert about $1 trillion a real trillion, not a Bush trillion into other uses. There will be elaborate sophistry about how money diverted into individual Social Security accounts is still "in the system," about how Medicare surpluses used to finance prescription drug benefits are still part of Medicare, but the fact is that in each case the money isn't available for its intended use.

Without those reserves Medicare will be in trouble early in the next decade, Social Security a bit later. But the pressure to cut benefits will begin years before.

In an unguarded moment during the campaign Mr. Bush remarked about the future Texas fiscal situation, "I hope I'm not here to deal with it." Maybe his attitude toward the consequences of his tax cut is the same: by the time the bill comes due, he'll be gone.

Originally published in The New York Times, 3.7.01