Tightening the belt?
President Bush announced his budget for 2006. The headline on Washington Post's front page story claims it "cuts many programs" and that "domestic spending falls". As you go on to read the article, it sure sounds like Bush is slashing the budget and that the deficit and spending are both going to drop big time with his new proposal.
About the only thing that I agree with is that the budget will cut many programs. The proposed budget actually calls for nearly $90 billion more in federal spending. The deficit gets cut thanks to the "Bush budget [predicting] that revenues, bolstered by a healthy economy, will rise by 6.1 percent to $2.18 trillion", thus allowing for a proposed cut of $47 billion to the budget deficit.
I can't say whether predicting tax receipts will increase by 6.1% is folly or fact, but I do know that I would really prefer true cuts in spending. If the $47 billion shaved off the deficit was actually shaved off of spending, the deficit would drop by $173 billion for a reduction of over 40%.
Overall, discretionary spending other than defense and homeland security would fall by nearly 1 percent, the first time in many years that funding for the major part of the budget controlled by Congress would actually go down in real terms.Sure, it is significant that discretionary spending will decrease (that it hasn't decreased once under this Republican Administration is beyond me). But, that 1% only reflects a $3 billion cut in non-security discretionary spending. Three billion dollars in a $2.6 trillion budget. In fact, discretionary spending overall increases $18 billion in the proposed budget. You can see the numbers here.
On a side note, Medicare spending will increase nearly $50 billion, "a 17 percent increase over last year, mostly for the prescription drug benefit that takes effect this year," according to the AP. Some of that increased spending would have been mandated regardless. I just wanted to point out the effect of the new Medicare law.
Now you might think I'm against this budget plan. I'm against characterizing it as a proposal that helps balance the budget or that reduces big government, but I actually like a lot of what is being proposed. Reading through WaPo's Agency Breakdown, I see a lot of good things in this budget.
Bush wants to "cut billions from planned spending on the Air Force's high-priority fighter jet program, the F/A-22, as well as Navy shipbuilding. The F/A-22 program will be halted in 2008 after 179 planes are built — 96 short of the Air Force's goal, and the Navy will get only four new vessels — one submarine and three ships — instead of the six that the Pentagon had said a year ago it would fund in the 2006 budget." Sure, it took the Iraq war to finally get the Pentagon to drop the F/A-22, but it is still a good idea with the JSF on the near horizon and nearly 200 F/A-22's in the skies.
The proposed budget calls for $256 million to secure nuclear material in Russia and former USSR states.
It earmarks an additional 10% for Border and Transportation spending at the DHS. It doubles spending on "developing detection devices for Customs and Border Protections agents" as well as hiring 210 new border patrol agents.
Basically the budget is shifting money away from programs that are "not achieving results," according to Bush, and into programs that can do some good--or that the President supports. A perfect example:
The Commerce Department budget would soar 49 percent under Bush's budget, to $9.4 billion in budget authority. But that is because Commerce would gain control over a host of economic development programs that were previously run by other departments -- and which would undergo cuts in funding of about one-third.Not that any of this matters:
These programs, the biggest of which is HUD's Community Development Block Grants, got about $5.7 billion in funding for 2005. Under Bush's fiscal 2006 budget, they would be folded into the new "Strengthening America's Communities Grant Program" and funded at $3.7 billion.
Nearly every program targeted for elimination has a patron on Capitol Hill, and the administration has assembled a list that may prove particularly dicey. "This is a long list of sensitive programs," said a congressional leadership aide. "A lot of these proposals we've been through before and the programs have survived. This is going to be a tough sell for the president."At the end of the day, Congress is going to resist and shoot down a lot of the program cuts. I love how even House Majority Whip Roy Blunt admits there will be a lot of opposition but then optimistically believes that Congress will cut "tens of millions of dollars and set the standard that the federal government can stop doing things that it shouldn't be doing, or is not doing well." You hear that? Tens of millions. That'll really put a dent in the federal debt. What's it at now, a 13- or 14-figure number?
The problem is that while many Americans don't like deficit spending--56% view it as a top priority according to a Pew Research Center survey--they really only dislike it in an abstract way. Most don't realize what the effects of deficit spending actually are. Even fewer realize that--from a budgetary perspective--if the President proposed a budget that eliminated completely the $427 billion deficit from 2005's budget that the federal government would cease to exist as we know it. I'm sure that would go over well with voters.
Two thirds of the $2.5 trillion the government spends is legislatively mandated and cannot be adjusted by Congress--the bulk of it in Social Security, Medicare, and Medicaid. The portion of the budget that Congress does control only equals about $800 billion. You could balance the budget by shuttering the DoD and Homeland Security. If you went the other way and cut every cent Congress has power over in the non-security programs--like the IRS, NASA, and the FBI--you'd still be short of that $427 billion.
When you look at the deficit from that perspective you realize how truly enormous it is. Plus, it doesn't account for the extra spending on Iraq. On the positive side, it seems to me that the federal government spends our money today on better and more effective programs than in the 80's and early 90's when the deficit was big issue.
Realistically, the only way we can balance our budget is by raising taxes and/or cutting entitlements. Considering Bush oversaw "the largest expansion of a domestic entitlement program in decades" and signed into law two massive tax cuts, I'm not really sure how he plans to cut the deficit in half by 2009. Actually, I do.
There is a third way to balance the budget: increase tax reciepts. The Bush Administration has consistently relied on rosy projections of increasing tax reciepts due to a robust economy to justify its increased spending and tax cuts. Just as consistently, tax reciepts have not met those optimistic projections. I hope that's not how the President expects to carry out his pledge.
Bush's proposed budget has its merits, none of which happen to be budget-balancing or government-reducing.
posted by Q at 2/07/2005 04:07:00 PM
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