Right data.

"AFTER two years in Washington, I long for the sincerity of Hollywood," Sen. Fred Thompson (R., Tenn.) quipped recently. He was referring to the latest federal budget.

Look at discretionary spending. Though it accounts for just one-third of the budget, President Clinton has stuffed three-quarters of all spending cuts between now and 2002 into this category. Defense, which represents about half of discretionary spending, has already been cut to 3.4 per cent of GDP today, from 5.3 per cent in 1990. Mr. Clinton wants to slash defense further, to 2.7 per cent by 2002.

An even bigger fraud occurs in non-defense discretionary spending, home of federal infrastructure, education, and other "investments" that Mr. Clinton once championed. For 15 years they have borne the brunt of deficit reduction. Yet Clinton's long-term plan takes them down further -- to 2 per cent of GDP around 2015, from 3.8 per cent of GDP today. That would pare government back not just to pre -Great Society but to pre - New Deal levels. Great news, if only we could believe it.

When Mr. Clinton released the budget, he made a little-noticed claim: not only would his plan meet the 2002 target, it would forestall deficits for two decades after that. That's impossible unless the big entitlements -- Social Security, Medicare, and Medicaid -- are throttled. In 1996 those programs ate up half the budget. Those expenditures can be cut only by new legislation.

So what does the President propose? On Medicare, the White House decrees that fees paid to hospitals will decline from their current 4.1 per cent real annual growth to 1.5 per cent in 2020. Doctors will also see their payments slashed. And for good measure, the Trust Fund avoids insolvency by shifting costly home services to a different account. "There is absolutely no policy change associated with the . . . reduction," says Carol Cox Wait of the Com- mittee for a Responsible Federal Budget. "It's insane." Projections show that medical entitlements will consume 6.6 per cent of GDP in 2020, up from 3.6 per cent now.

Social Security costs are driven by inflation and demographics. Shaving 1.1 percentage points off the official CPI, as was recently recommended by a panel of economists, could reduce the deficit by $50 billion by 2002, with smaller Social Security payments accounting for much of the improvement. Most economists, including the President's own, believe some sort of CPI fix is essential for long-term budget balance, and yet the President seemed to reject the notion last month. Meanwhile, the Social Security Trust Fund will be in the red starting in 2012; total insolvency is projected for 2029.

At least welfare has been taken off automatic pilot. Last year's reform changed the main program -- AFDC -- from an entitlement to a block grant, meaning that it will have to undergo regular congressional scrutiny. But at $17 billion in 1996, AFDC is just 1 per cent of the budget. Middle-class entitlements are far larger and more difficult to change.

Ultimately, the President's balanced-budget forecast hinges on continuation of the economic performance of the past few years. Mr. Clinton sees growth stay- ing near its recent average, at 2.3 per cent, while unemployment stays as low as 5.5 per cent, and inflation a very low 2.7 per cent. So far so good: tax revenues generated by the surging economy could push the deficit below $100 billion this year, according to the Congressional Budget Office. But there has never been a period of economic growth as prolonged as the one foreseen in the budget. Even a mild slowdown would send deficit numbers soaring.