The Treasury is taking in more tax money than expected. Which means the federal budget deficit will be lower than expected.

So says the White House, which cites this as proof: (a) that the tax cuts President Bush pushed through in 2001 and 2003 are working, and (b) that the president is well on his way to cutting the deficit in half, just as he promised.

There are problems with these claims, however.

First, note the use of the word expected, which ought to set your antennae quivering right away. The immediate next question: Expected by whom?

By the White House itself, it turns out.

Key to yesterday's big announcement was an earlier estimate that the federal deficit would run about $423 billion this year.

Now, with half a year's tax revenue in the till, it looks like the deficit will be a mere $296 billion - an improvement of $127 billion!

Both forecasts, however, come from the Office of Management and Budget - the president's own bean counters, an agency even closer to the Oval Office than a cabinet department such as Treasury.

As a number of close observers have noted, the Bush OMB has a habit of issuing gloomy deficit forecasts early each year, only to find later that the numbers are better than expected.

OMB's apparent surprise

It happened in 2003; it happened in 2004; it happened again in 2005. Each year, the OMB found to its apparent surprise that the deficit was shrinking - compared with what the OMB itself had expected, that is.

Since surprises are by definition what make news, guess which stories tend to wind up on the television at 6 o'clock.

If this were merely about playing with budget numbers for the sake of a little presidential PR, there wouldn't be that much to complain about. All politicians like to frame their messages as good news, after all.

Unfortunately, there's a more insidious shell game going on here. The deficit dance is part of a long-running effort to frame the narrative of Bush's presidency in terms that run counter to reality.

The president likes to brag that his tax cuts eased the economy through the recession of 2001 and spurred a recovery that is still under way.

That's debatable. It's just as easy to argue that tax increases had an identical effect in the early '90s, when the economy went through a similar cycle. (In fact, by some measures, such as job growth, the early recovery was stronger.)

Economy's real savior

And it's likely that in both periods - the early '90s and the early '00s - the economy's real savior was the Federal Reserve, which cut interest rates aggressively as growth slowed down.

It's true, or at least widely accepted by economists, that federal tax cuts can stimulate economic activity by increasing the rewards for work, investment and savings.

But even most conservatives don't buy the additional notion - which the Bush administration pushes at least tacitly - that tax cuts effectively pay for themselves.

That notion, first popularized under Ronald Reagan, is that tax cuts stimulate so much extra growth that tax revenue will remain the same or even rise after rates are cut.

It just ain't so - at least not at the federal level, and not given where taxes are already. A $1 cut in tax rates may generate an extra 25 or 50 cents in revenue, but not near the full $1.

Moreover, the increasing evidence suggests tax cuts work their magic on the economy only if government spending is cut as well.

Otherwise they simply produce deficits and debt, which ends up costing future generations more than the tax cuts save us today.

That's what is really happening. After Congress passed the Bush tax cuts, it went on to boost spending by record amounts - for the Iraq war, for the new Medicare drug benefit, and for scores of pork-barrel "earmarks" to help incumbents win reelection.

Which means the bill for our kids and grandkids will be bigger than expected.