TEXT OF INTERVIEW

KAI RYSSDAL: President Bush wasn't about to let the day pass unnoticed. In fact, he got a jump on the Democrats with an op-ed in today's Wall Street Journal. And with some remarks to television cameras this morning. Bipartisanship got a nod. He mentioned how he looks forward to working with the other party. And then the president said some things about the economy that deserve a closer look.

So we called Maya MacGuineas. She's the director of the fiscal policy program at the New America Foundation. Maya, good to talk with you.

MAYA MACGUINEAS: Hi, happy to be here.

RYSSDAL: So, we listened to the President this morning. We read his op-ed piece in the Wall Street Journal. Thought we might check really what exactly he's saying here and what it might all mean. Let's play the first cut of tape for you from this morning:

PRESIDENT BUSH: Over the past few years, pro-growth economic policies have generated higher revenues. Together with spending restraint these policies allowed us to meet our goal of cutting the budget deficit in half, three years ahead of schedule. We did so without taxing the working people. We kept taxes low.

RYSSDAL: First question to you, Maya, is: Have they cut the deficit in half, as the President says?

MACGUINEAS: Well, it's kind of a tricky game of semantics there. By the standards that they set, they cut the deficit in half. Which means the deficit is half of what they were projecting it would be. But it turns out that their projections that they put forth were actually not correct. And the second kind of tricky part is that they were claiming it's cut in half as a share of the economy. But if you look at the basic numbers, where the deficit was and then where it is today, no it is not yet cut in half of where it was when he first made that promise. But the numbers have been coming down. They're moving in the right direction. I would say they're not moving there quickly enough.

RYSSDAL: What about spending restraint. He's not counting here any of the Pentagon spending in Iraq and Afghanistan, either, is he?

MACGUINEAS: Well, I think by any definition the only way you can say that there has been spending restraint is if you take huge parts of the budget out. Now, even members of the President's own party have been very dissatisfied by the fact that spending has grown much higher under this President than it has under past presidents. So, spending restraint is probably not something that this administration has bragging rights to.

RYSSDAL: Alright. He talked a little bit about his upcoming budget, too. Let's listen to that:

PRESIDENT BUSH: Next month I will present a five-year budget proposal that will balance the federal budget by 2012. This budget will restrain spending, while setting priorities.

RYSSDAL: What's he going to have to do, Maya, to get that done?

MACGUINEAS: Well, it's a good promise. It's not even an overly aggressive promise. It is really quite possible that the budget will be balanced by 2012. But the things to look for are, is his budget going to include all of the things that, one, we know will be there? For instance, will it include the spending on the war and operations in Afghanistan and Iraq. Two, will it include all the other things he has said he would like to have as part of public policy? Meaning, Social Security reform, or fixing the Alternative Minimum Tax, or making the tax cuts permanent. And three, is it realistic? If he kind of plays games with the budget by promising to keep certain parts of it very low, beyond what we've ever seen — knowing that Congress will then go in and boost up those spending numbers — then it's not really credible.

But the bottom line is, I think getting the deficit eliminated by 2012 is quite doable if you have both parties working together. But one of the real challenges is, we should actually be running budget surpluses long before 2012 in order to prepare for the upcoming retirement of the Baby Boom. So even that goal's not as aggressive as it should be.

RYSSDAL: Does any of this matter right now. I mean, 2012 is the end of somebody else's first term in office.

MACGUINEAS: Yeah, when it comes to budgeting, you put forward a budget that's five years — or even better, 10 years. But really you're just budgeting for the very next year. So the President's budget is really more important in that it shows what that Administration's policy priorities are. But Congress is where the real work gets done. They get started . . . they don't even have to take the President's budget as the starting place. They can start from scratch on their own budget. And you really are thinking about this in terms of one year what will happen. And are there any important policy initiatives that will change the course of budgeting. And those kinds of things would be changing what tax cuts are made permament, which ones aren't. More entitlement reform, or real scaling back of some of the spending or even tax increases. Those are the kinds of things that would change the budget for the longer term.

RYSSDAL: And, of course, Congress comes back tomorrow. That's when the fun starts. Maya MacGuineas from the Committee for a Responsible Federal Budget at the New America Foundation. Maya, thanks a lot.

MACGUINEAS: Thanks so much.