HERE'S A news flash: The federal government is still projected to rack up at least $4 trillion in additional debt from annual budget deficits over the next decade.
This is the ugly long-term reality unchanged by the short-term good news last week that the Bush administration has lowered its projected budget deficit for this fiscal year from $427 billion to $333 billion.
It also provides a less than optimistic backdrop to the White House's happy theory that its record tax cuts have produced the supply-side nirvana of greater growth and tax revenues.
"Our tax relief plan, our pro-growth policies, are working," President Bush declared in heralding the surge in tax revenues cutting this year's deficit.
Not so fast, Mr. President.
This year's deficit still will be the third-largest in history, after those of the last two years. The White House's new projections don't include all the costs of the wars in Iraq and Afghanistan. They also don't include tax revenue likely lost in any fix of the alternative minimum tax.
And a breakdown of this spring's surge in tax receipts shows that it's more likely temporary -- with the bulk of the increase coming from a one-time tax break for corporate profits repatriated from abroad and from ending a corporate depreciation bonus.
With low- and middle-income wage earners barely keeping up with inflation, growth in personal tax revenues is coming mainly from non-withheld taxes -- from taxes on stock market and real estate gains, highly concentrated among the very well-off.
If supply-side theories were really at work here, you'd expect to see much greater gains from withholding taxes on wages.
By the way, many of the same dynamics are at work within Maryland. A one-time boost in corporate taxes from a rule change and gains in non-wage income have led state fiscal analysts to predict recently that the state's structural budget gap can be met through the 2007 fiscal year.
However, that only defers -- not resolves -- the long-term problem of anticipated state revenues not keeping pace with projected expenses, state analysts say.
Similarly, even amid the huzzahs from the White House last week, U.S. Comptroller General David M. Walker was stressing that the recent bump in tax receipts didn't alter the grim long-term budget outlook -- particularly with Social Security surpluses starting to dry up as the first baby boomers retire in 2008.
Good economic news is welcome, of course, but let's not conclude that fiscal discipline starts with big tax cuts for the well-off. Let's recall that when Mr. Bush took office, the nation was running a budget surplus, that a gain in tax revenues only looks great against the last three years of falling receipts, and that the deficit is falling from two years of record deficits.
Mr. Bush's tax cuts led to the bulk of his presidency's deficits. They are the source of this fiscal hole, not its solution.