Downplaying debt limit increase. (Insider Report).

President Bush on May 27th signed into law important legislation supposedly needed to prevent an unprecedented federal default. But he signed the bill without any public ceremony or fanfare. Instead, the White House issued a simple, one-sentence statement that read, in its entirety: "On Tuesday, May 27, 2003, the President signed into law: H.J.Res. 51, which increases the public debt limit from $6.4 trillion to $7.384 trillion."

That increase, $984 billion, is the largest jump ever in the debt limit. In fact, the debt limit did not exceed $1 trillion until 1981. Now, only 22 years later, the debt limit was increased by almost a trillion dollars in a single act. Obviously, Mr. Bush did not want to make his signing of this legislation a media event.

But the following day, May 28th, was different, when, amidst plenty of fanfare at a White House ceremony, Mr. Bush signed into law his tax-cut plan officially known as the "Jobs and Growth Tax Relief Act of 2003." Standing behind him as he signed the bill were Secretary of Commerce Donald Evans, Secretary of the Treasury John Snow, Senate Majority Leader Bill Frist (R-Tenn.), and House Ways and Means Committee Chairman Bill Thomas (R-Calif.).

Of course, the White House recognized that the debt limit increase would tarnish Mr. Bush's image as a fiscal conservative while the tax-cut signing would enhance his image. That's why Bush's handlers downplayed the former while playing up the latter. But there is a connection between the two pieces of legislation that should not be ignored: Cutting taxes without cutting spending will not reduce the government's drag on the economy. It will instead force the government to borrow even more money.