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A Budget Reality Checkby
Tad DeHaven & Veronique de Rugy Feb 18, 2005 President Bush's FY2006 budget is being widely derided in the media and
across the political landscape. The newswires are alive with dramatic
claims of "deep cuts" and "scores" of programs being axed. The New
York Times has taken umbrage with what it refers to as "the cruelest cuts." The
Washington Post labeled proposed cuts "draconian" and counseled lawmakers
to "remember the poor." All lament the President's "tax cuts for the
rich" and obsess over the deficit.
The usual suspects in Congress typically reacted as if the administration
had just ushered in the apocalypse. Rep. John Spratt (D-S.C.), the
ranking Democrat on the House Budget Committee, said the administration wants
to cut "critical investments" in order to pay for "tax cuts and costly new
proposals." Sen. Arlen Specter (R-PA), Senior Senate Appropriations
Committee member, declared that "these cuts are unacceptable."
With all of this dire rhetoric one could be forgiven for concluding that
widows and children will be starving in the street. But while the Beltway
intelligentsia is wailing and gnashing its teeth, the administration is painting
the budget as a primrose picture of fiscal austerity.
The President's budget message states that "This Budget builds on the budget
restraint we have achieved." In fact, the two-page Budget Overview
that follows mentions "restraint" eight more times. As was the case
last year, the White House points to declining annual rates of increase in
non-defense, non-homeland security discretionary appropriations as proof
of this "fiscal restraint." But it is impossible to take this claim
at face value when such a category only represents one-sixth of the total
federal budget. Moreover, the numbers the administration cites are
misleading because they exclude supplemental appropriations and are not actual
outlays.
The fact is this administration has presided over federal budget growth
unseen since the days of Lyndon Johnson. Since President Bush came
into office four years ago, the federal budget has grown 33%, and will begin
approaching 40% next year. Although Congress deserves much of the blame
for promoting this rampant largesse, the Bush administration has yet to veto
a single bill and has rarely made a serious effort to limit spending--let
alone cut it.
Bearing all of this in mind, it is almost amusing that the administration's
latest budget proposal is generating so much vitriol from statists on the
Hill and in the press. While it is true that the President's fifth
budget submission is the tightest, it is not a model of Jeffersonian ideals.
Yes, Amtrak subsidies are targeted for deletion, farm subsidy payment limits
would be reduced, and out-of-control Medicaid expenditures would be challenged. And
yes, the administration is proposing to eliminate or cut 150 programs in
areas ranging from education to housing. Praise the Lord and keep it
coming.
But while 150 programs sounds like a lot, the combined savings would amount
to peanuts in a $2.57 trillion budget riddled with thousands of programs. To
pick out one or two and claim that the President intends to "slash" education
spending or "endanger" the health of our "neediest citizens" is plain nonsense. Spending
at the Department of Education rose an astounding 98.6% in the President's
first term while health care expenditures--even with Medicare excluded--jumped
49.5%.
It's amazing how Congressional spendthrifts and their sympathizers in the
media never forget about the tax cuts, but suddenly develop a case of amnesia
when minor spending reductions are proposed. Talk about selective memory.
This latest budget may be a step in the right direction, but a much stronger
stance against runaway entitlement spending is required. While the
President is to be applauded for his willingness to address Social Security,
Medicare remains the biggest long-term budget liability. Wednesday's
news that the Medicare prescription drug benefit is projected to cost taxpayers
an astounding $724 billion over the next ten years proves that its creation
was a mistake that needs quick correcting. But instead of reaching
out to folks on the Hill like Rep. Mike Pence (R-IN) and Sen. Judd Gregg
(R-NH), who have publicly entertained the possibility of scaling back the
drug add-on, the President immediately threatened to veto any such attempts
to do so.
The fact is Congress has a spending addiction, and appears to be incapable
of curbing its appetite regardless of which party is in the majority. And,
the mainstream media continues to poison the public discourse with its unrelenting
attacks on even modest proposals to cut spending. At the same time,
the administration has done itself no favors by failing to make a serious
attempt at controlling spending. Social Security reform, overhaul of
the tax code, and even the permanence of the President's previous tax cuts
are in jeopardy as a result.
Tad DeHaven is an Economic Policy Analyst with the National Taxpayers
Union. Veronique
de Rugy is a visiting scholar at the American Enterprise Institute and an
Adjunct Scholar at the Cato Institute. |
