Bush's "Lame Duck" Budget Looks Like "Tame Duck" to Taxpayers, Analysis Shows

(Alexandria, VA) -- The Bush Administration's 2009 "lame duck" budget admirably proposes to make tax-rate reductions permanent and slow the growth of some spending, but taxpayers have seen birds of this feather quacking to no avail around Washington before. That's the conclusion of the National Taxpayers Union Foundation (NTUF), which analyzed the Bush budget shortly after its release.

"The 2009 budget looks like an exercise in humility as well as futility," said NTUF Senior Policy Analyst Demian Brady. "On one hand, President Bush is calling for the kind of spending restraint his Administration has largely not achieved in seven years, while on the other hand, Congress is likely to reject most of his recommendations just as it has over the past seven years."

Among NTUF's findings:

  • On an encouraging note, Bush's last budget projected that federal outlays would top $2.78 trillion in Fiscal Year 2007; his latest budget, however, shows that the actual level reached $2.73 trillion ($54 billion less than initially forecasted). However, subsequent years' outlays are less impressive. The current estimate for FY 2009 spending, at $3.11 trillion, is some $122 billion more than what it was projected to be in Bush's previous budget.
  • Between Fiscal Years 2008 and 2013, the Administration is calling for an average annual spending increase of 2.2 percent. However, so far during President Bush's tenure (Fiscal Years 2000 through 2008), federal outlays have risen an average of 7.1 percent each year.
  • Among the agencies that are spending less in FY 2008 than the President's last budget predicted are the Department of the Treasury ($4.8 billion), international assistance programs ($2.7 billion), and the Department of Labor ($2.6 billion). These figures generally do NOT represent a real drop in outlays, but rather slower rates of increase.
  • Agencies that are spending more than what the Administration projected they would for FY 2008 are the Departments of Health and Human Services ($10.1 billion), Education ($9.4 billion), and Housing and Urban Development ($7.9 billion).
  • After three years of predicting that federal spending would not exceed $3 trillion until 2010, the Administration now assumes this amount will be reached next year.
  • It took nearly 200 years before total federal spending topped $1 trillion (in 1987). In 2002, 15 years later, spending exceeded $2 trillion. By most indications, it will have taken less than half that time -- seven years -- to break the $3 trillion mark.
  • The White House commendably proposes $208.2 billion in savings between FY 2009 and FY 2013 from mandatory programs (not including $30.3 billion in higher expenditures from a personal savings account proposal). Bush's critics notwithstanding, this represents less than 2 percent of the $10.5 trillion to be spent on mandatory items during that same period.
  • Between 2009 and 2010, total outlays of all kinds are projected to decline by $16.1 billion. This is an admirable but difficult goal, since current-dollar federal spending has fallen just once during the past 45 years.
  • The budget's predicted surplus by 2012 will largely be a product of taxpayers delivering more revenues to Washington. For example, the Administration proposes discretionary and mandatory savings of roughly $35 billion between 2008 and 2009, even as higher tax collections will bring in $179 billion over that period.

Brady noted that many Bush budget proposals have met, and will meet with, stiff resistance from Congress. For example, 211 programs listed for reductions under the White House's Program Assessment Rating Tool in FY 2009 were also recommended for cuts in the FY 2008 budget. In the end, just 18 of these 211 received some kind of funding reduction during the Congressional budget process. Moreover, some of the President's larger savings proposals, such as Medicare reform and reductions in Amtrak subsidies, seem unlikely to pass intact.

"The President's promise to veto spending bills that exceed his request could slow the pace of federal outlays should he follow through, but many Members of Congress will be exerting an equal and opposite pressure to spend more tax dollars," Brady concluded. "As past history and current data show, the prospect of a budget surplus brought about by limiting the growth of government is uncertain at best."

NTUF is the non-partisan research and educational arm of the 362,000-member National Taxpayers Union. Note: For additional studies on fiscal policy, including a cost analysis of the President's State of the Union speech, visit www.ntu.org.

 

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