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Press Release


State of Union Speech's Annual "Price Tag" Drops to Record Low of $12.8 Billion, Study Finds

For Immediate Release February 3, 2005

(Alexandria, VA) -- By repeating many proposals from his 2004 speech and avoiding costly new ones, last night President Bush called for $12.8 billion in additional yearly federal spending -- the smallest increase among the six most recent State of the Union addresses, according to a line-by-line analysis released today by the non-partisan National Taxpayers Union Foundation (NTUF).

Among the findings:

  • President Bush outlined items whose enactment would increase federal spending by a net of $12.8 billion per year, slightly lower than the $13.6 billion outlined in 2004 and a fraction of the annual spending hikes he proposed in 2003 ($51.9 billion) or in 2002 ($106.6 billion). This overall level is the lowest NTUF has recorded since it began tracking Presidential addresses in 1999 (that year Bill Clinton proposed $305 billion in spending hikes).
  • Of the 14 items with a quantifiable budget impact that NTUF identified in Bush's speech, 13 would increase federal spending (the lone reduction of $890 million would result from enactment of medical liability reform). Among the President's largest spending increase proposals were enactment of controversial energy legislation ($4.4 billion) and expansion of the Pell Grant college finance program ($2.7 billion).
  • However, Bush's 2005 total might have climbed above that of his 2004 speech, were it not for a recently-revised price tag to provide health insurance credits to low-income workers. The "refundable" (i.e., in excess of actual tax liability) portion of this credit would increase federal spending by $4.1 billion, which is $3.5 billion less than budget experts estimated in 2004.
  • Five of President Bush's 2005 State of the Union proposals (energy legislation, association health plans, medical information technology, community college funding, and the health insurance tax credit) are "repeats" from his 2004 speech. Two others (Pell Grant expansion and aid to high schools) bear a strong resemblance to proposals he made last year. New recommendations include a $150 million hike for "Palestinian ? reforms," along with $236 million for defense counsel training in capital cases and wider use of DNA evidence.

NTUF Senior Policy Analyst Demian Brady, who conducted the study, noted that President Bush's announcement of over 150 program eliminations, reductions, and consolidations was not evaluated in the analysis due to a lack of specificity. Brady also noted that the President's Social Security reform proposals could "lead to much less pressure on future federal spending owing to a reduction in long-term benefit liabilities." However, this fiscal impact was beyond the scope of the study's methodology.

"George W. Bush's stated intention of cutting the estimated federal deficit in half by the end of his term will be difficult to achieve without serious spending reductions on top of those he said would be forthcoming in the 2006 budget," Brady concluded. "As this data shows, however, at least the platform he outlined in last night's speech won't place that ambitious goal much further out of reach. Whether Congress will be a help or a hindrance in this effort remains to be seen."

Since 1991, NTUF has tracked the fiscal impact of proposed legislation through BillTally, an accounting database that reports the "net annual agenda cost" for each Member of Congress based on sponsorships and cosponsorships of pending legislation. For this analysis, NTUF matched Bush's proposals with those in the BillTally system and in White House documents.

NTUF is the research affiliate of the 350,000-member National Taxpayers Union, a non-profit citizen group founded in 1969. Note: A chart of the costs of President Bush's State of the Union proposals and a graphic comparison to previous speeches are available at www.ntu.org.

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