I have to admit that I didn’t notice it either when the Treasury last week showed that the fiscal 2012 deficit could be almost 30 percent lower than the deficit actually recorded in fiscal 2011.
The new estimate of $996.5 billion for the 2012 deficit that was included in table 2 of the Monthly Treasury Statement for October 2011 was an eye-popping $419.7 billion less than the $1.416.2 trillion deficit in 2011.
The 2012 estimate is just that — an estimate. Not only is the fiscal year only 10 weeks old, but the Treasury number is based on the mid-session review of the budget that was published in September, that is, more than 3 months ago. The number almost certainly will change as the year continues.
So just to be safe, let’s say that the federal deficit will fall from 2011 to 2012 by $350 billion rather than almost $420 billion (Note…it could just as easily fall by more instead of less). The question remains: Why wasn’t it bigger news? After all, other than the years immediately following World War II, this would be one of the largest one-year drops in U.S. history.
The answer is that, now matter how much lower it may be than the previous year, a $996 billion deficit still sounds high to most people. More important, it can be demagogued to sound high. So while the White House might want to take credit for the deficit falling, it would also have to be prepared for the criticism that in the current environment almost certainly would come its way from a deficit that will be close to $1 trillion.
Therefore, from a communications perspective (remember that my day job is as a partner in a large communications agency), the White House obviously decided that it was better not to raise the issue at all even though the situation maybe improving substantially and a victory lap is justified. That deprived congressional Republicans of the ability to talk about the issue and criticize the administration. No news = no ability to comment.