Bush lied. About the cost of his tax cut. About who benefits. About his budget. He lied when he claimed he could throw money at the military, fund a prescription drug benefit, pass his tax cut and still not touch the Social Security surplus. And he's lying now as his budget office cooks the books to mask the fact that he's already dipping into the Social Security surplus–without counting the full cost of his military fantasies, or a decent drug benefit, or the inevitable tax and spending adjustments yet to come.

Democrats have every reason to rail about Bush's lies and to condemn his irresponsible tax cut–about a third of which will go to the wealthiest 1 percent (and for which, it should be noted, twelve Democratic senators voted). But Democrats are about to lock themselves in their own box with their posturing about the "raid on the Social Security trust fund."

There is no lockbox and no raid. The Social Security and Medicare trust funds are credited with bonds for every dollar of surplus whether the money is spent, given away in tax cuts or used to pay down the debt. Those bonds–the most secure investment in the world–can be redeemed when Social Security payments start to exceed payroll taxes. When the surpluses first showed up, Clinton invented the notion that paying down the debt would "save Social Security first" as a clever tactical ploy to fend off Republican tax cuts. With the economy growing and unemployment low, debt reduction had a threadbare rationale. But even then, Clinton was forfeiting a historic opportunity to argue for meeting vital needs: healthcare, housing, more classrooms and teachers, preschool for all. Now Democrats have turned Clinton's tactics into perverse principle. The trust fund surplus is "raided" if it doesn't go toward debt reduction. House minority leader Dick Gephardt argues that Bush should present a new budget–one with either less spending or more taxes.

But the world economy is teetering on the verge of a global recession. Japan is sinking. Europe is slowing. Latin America is a basket case. The US stock market has tanked. Corporations are slashing investment and laying off workers. Consumers are starting to tighten their belts. State and local governments are cutting programs. This is hardly the moment for the federal government to run the second-largest surplus in history. And Bush already has his tax cut for the wealthy. So all the Democratic posturing about the lockbox puts pressure on spending. Already White House flack Ari Fleischer says the squeeze "will prevent the politicians from busting the budget and spending more pork." Worse, Democratic talk about "raiding the trust fund" adds to the myth that Social Security is at risk–a big lie that Bush is pushing to sell private accounts and cuts in guaranteed benefits.

Democrats should be indicting Bush for turning his back on working families by enforcing austerity in a time of need. They should be making the case for extending unemployment insurance, aiding poor mothers (the first to be laid off), making investments in housing, schools and mass transit that can help jump-start the economy. And they should be taking credit for the tax rebate that people are getting–that was a Democratic idea that wasn't even in the Bush plan. Instead, Democrats are whistling Calvin Coolidge and ceding the growth argument to Bush. Bush says his tax cuts are needed to help the economy revive; that's right–only he's lying about his tax cut. Most of it doesn't kick in for years and goes to the already rich. Those cuts should be reversed, particularly the ones in the estate tax, which is paid only by the wealthiest families. Democrats should reclaim the money for investment in making America better.

Now we have a dishonest debate: Bush lies, and Democrats defend austerity in a time of need. It's time for progressives inside and outside Congress to find their voice and break with austerity politics.