IN THE NEWS

Editorial

Minneapolis Star Tribune

MEAN, NOT LEAN - BUSH'S ABYSMAL BUDGET

February 8, 2005

On Monday, President Bush sent Congress the most austere federal budget in perhaps 30 years, a plan that would slash aid to cities by one-third, eliminate health insurance for thousands of low-income families, reduce veterans' medical benefits, cut funding for city cops and county sheriffs, wipe out child care subsidies for 300,000 families, trim funding for clean water and soil conservation and shutter dozens of programs for preschool children and at-risk youth.

These are not the priorities that Americans voted for in 2000 and 2004.
The president justifies this extraordinary penury by insisting that he has to tame the federal budget deficit, which has grown steadily since he took office and this year will reach a record $427 billion. Fair enough: The deficit is placing a drag on the economy, undermining the dollar in world currency markets and bequeathing a terrible debt load to the next generation of American taxpayers.

What Bush wants to ignore, however, is that it's his own policies that have largely created today's red ink. No longer can he blame the recession; that ended three years ago. He can't blame the struggle against terrorism; those costs aren't even included in his budget proposal. No, to paraphrase an articulate governor we know, Washington doesn't have a spending problem, it has a revenue problem. Federal outlays this year will be lower, as a share of the economy, than they were 10 years ago. But after Bush championed four tax cuts in four years, federal revenues have fallen to the lowest share of gross domestic product since 1959.

Astonishingly, the president seems to think that revenues should go even lower. His budget includes a raft of new tax cuts and a plan to make the 2001 and 2003 tax cuts permanent. Bush insists that he wants to cut the federal deficit in half over the next five years yet documents from his own budget office show that his budget, with its tax cuts, would actually drive the federal deficit higher than it otherwise would be.
Quite apart from its miserly priorities, the budget sets a new standard for deceptive accounting. The White House said last month that it will ask Congress for another $80 billion for operations in Iraq and Afghanistan, yet that money is not included in yesterday's proposal. Does Bush plan to pay the troops with Monopoly money? Nor does it include the cost of the president's plan for private accounts in Social Security, which the White House now admits will cost at least $700 billion in the next decade and more in years after that. Include those amounts, and government borrowing over the next decade will soar to staggering levels.

The president seems to think he can run a 21st-century nation on a Mamie Eisenhower budget, taking Americans back to a time before Medicare, the Interstate Highway System, the Environmental Protection Agency and other great strides of the last half-century. That might be fine for the 1 percent who can care for themselves with the Bush administration's tax cuts, but it is a ruinous direction for everyone else.

But in all nearly all other areas, the administration appears willfully ignorant of the fiscal damage it is causing. Record deficits put the U.S. economy at the mercy of its foreign creditors, raise the chances of significant increases in interest rates and will make it harder for the government to borrow money to fix Social Security when baby boomers retire.

A meaningful effort to restore fiscal discipline would involve addressing the parts of the budget that are causing the biggest problems. It would have to start with the runaway costs of health care and other benefits that now make up 55% of the budget and are growing rapidly. It would mean asking the public to pay now for the war in Iraq, rather than putting the costs on a credit card. It would also mean repealing or rolling back some of the tax cuts slanted toward the wealthy that were enacted without a way to pay for them.

Bush and Congress appear unwilling to make these choices. For a president who has offered bold, even politically risky proposals in other areas, his unwillingness to address fiscal reality is reckless.