Hey, Big Spender ...

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Yet Bush hopes to earn his credentials as a fiscal disciplinarian when he talks about the long-term challenges posed by the exploding cost of entitlement programs, which together take up half the budget and are immune to White House or congressional tinkering. He wants to use his remaining years in office to persuade Congress to make transformational, money-saving changes in those programs, especially Medicare.

"We need to cut the rate of growth of those programs," Bolten said. No amount of tax increases or spending cuts in the regular budget would be enough to cover the looming costs of baby-boomer retirees, he said. "Medicare must be put on a path toward a more market-oriented system," Bolten said. "We're ultimately going to have to look at whether the system needs to be more means-tested," referring to differences in benefits depending on income.

Leon Panetta, a Democrat who was Budget Director under Clinton and is a former chairman of the House Budget Committee, chuckled when he heard about Bush's plan to project an image of restraint. "What the hell's he using for numbers to map that out?" Panetta asked over the phone from Seaside, Calif., where he runs the Panetta Institute, a nonpartisan center for the study of public policy. "He has put us in a deep hole that's going to be very tough to get out of."

The federal debt has risen from $5.7 trillion when Bush took office to more than $8 trillion today. According to the U.S. Comptroller General, there is already some $40 trillion in unfunded liabilities--promised payments that current revenue streams won't be able to cover--in the Medicare and Social Security systems. Of that, $8 trillion comes from Bush's prescription-drug plan alone--a figure that is equal to all the national debt that has been accumulating since the time of George Washington.

But Bush never promised the U.S. another Ronald Reagan. That President went to Washington declaring that government was the problem and vowing to do away with whole agencies. Bush pointedly never called for eliminating traditional conservative targets like the Department of Education. "Those efforts typically aren't successful, and they weren't at the core of animating this President's view of conservatism," Bolten said. Instead, Bush's "compassionate conservative" philosophy called for more limited but still robust government, including creating an office for faith-based initiatives and backing the No Child Left Behind law.

When Reagan and President George H.W. Bush saw their deficits spinning out of control, they both raised taxes. But this President has adamantly refused to rescind any of his tax cuts. He wants to make permanent many cuts that are due to expire--such as the estate tax and the 15% rate on capital gains.

Democrats and many economists feel that that's a guarantee of more deficits. But Bush insists that failure to extend tax cuts--which he calls a tax increase--won't cure the deficit because it will slow down a fragile economy. "In my judgment," Bush told a crowd of business people at a moving-van lot in northern Virginia last week, "the best way to solve the deficit is to grow the economy--not run up your taxes." But the reality is that with the help of his tax cuts, Bush has already piled on more than a trillion dollars to the national debt.