The crew over at National Review Online authored an editorial today in which they suggest that President Bush might soon be able to take a victory lap. Why? Because the deficit is shrinking faster than anyone thought it would.

Fresh data from the Congressional Budget Office shows that the deficit-to-date for the current fiscal year is $50 billion smaller than it was this time last year. Since President Bush declared that one of his second-term goals would be to cut the deficit in half (as a share of GDP) by 2009, the NRO editors all-but-suggest that it might soon be time for the White House to recycle those old “Mission Accomplished” banners.

Yes, the economy is growing faster than anyone anticipated, and that’s very good (if underreported) news. This has led to a larger-than-expected boost in tax revenue, too – so unexpected, in fact, that Congress and the President haven’t been able to find ways to spend it all, although that’s not for lack of trying. Ergo, the budget deficit shrinks.

But if you look beyond the self-congratulation, you might notice how far Republicans have retreated from the battle for limited government (as I explain in my forthcoming book). When Republicans won control of Congress in 1994, they promised elimination of the budget deficit in seven years – a promise they were able to make good on in just three years. Now the GOP’s fiscal Maginot line has been drawn at merely halving the deficit in five years. That this less-than-impressive goal might be achieved sooner than later is really a tiny consolation.

Besides, a single-minded focus on the yearly budget deficit causes the GOP to draw their eyes off what should be the real prize: A reduction in the size of government altogether. Is there a good reason, for instance, why supporters of limited government should prefer a balanced budget that swallows up 20% of the U.S. economy to one that eats 18.4% as it did in 2000?

It looks like we might just have to settle for the former. According to the most recent data available, gross domestic product grew by 6.8% since last March. But federal spending ballooned by 9% over the same period. The U.S. economy has substantial ground to cover to make this a competitive race.

Or, think of it this way: If the federal budget had grown from the day George W. Bush was inaugurated at the same annual rate it had for the six years before he came to office, the federal budget would consume only 17% of GDP today. And it would be balanced, even after taking into account the tax cuts. Instead, the budget is still unbalanced today and government spending hovers around 20%.

This fall, Republicans will likely trumpet the news of the incredible shrinking deficit as an unsung victory for small-government conservatives. That the economy is getting better is something to which the mainstream press should be paying more attention. But the news on the deficit is only a very small victory, however, and one that hardly proves that the GOP is still a party of small government.