Wednesday, February 9, 2005
There is no way to put a happy face on the budget President Bush has submitted to Congress.
The $2.57 trillion budget is a 43 percent increase over fiscal year 2000, when the budget was $1.8 trillion. And the president's proposal doesn't include almost $90 billion for the war in Iraq and Afghanistan or any of the costs that would be incurred in the president's proposed privatization of Social Security (which he estimates at $754 billion over the first 10 years and critics say would be almost three times that amount).
The 2000 budget had a surplus of $237 billion, following a surplus of $124 billion in FY 1999 and $69 billion in FY 1998, which was the first time the United States had three surpluses in a row since 1947-49. At that point, the estimated surplus was $1.9 trillion over 10 years, which would have dropped the national debt from $5.5 trillion at the beginning of the decade to $3.6 billion at the end.
Growing like Topsy
Now, even under the president's most optimistic projections, the national debt in 2010 will be $11.1 trillion, which is twice what it was at the beginning of the decade and three times what it would have been if the federal government had not slipped from running budget surpluses to racking up record budget deficits.
Interestingly, some of the same people who considered themselves fiscal conservatives or deficit hawks in the 1990s and were advocating a balanced budget amendment to the Constitution are now saying that the deficit and debt aren't anything to worry about. They prefer to view the deficits and growing debt in the context of the nation's economy, which they predict will grow at more than 3 percent into infinity.
Vice President Dick Cheney famously said that President Ronald Reagan proved that deficits don't matter. Well, when hundreds of millions of dollars are being consumed every year to service that growing debt, deficits do matter.
No easy cuts
Making the looming deficit situation even more ominous is the political reality that those cuts that President Bush has worked into his budget are likely to face strong opposition in Congress.
His $2.57 trillion budget would boost spending on defense and on homeland security. But it would limit increases on all other discretionary domestic spending, basically most of the Cabinet departments, to 1 percent this year and 1 percent next. Given the natural increase in demand for programs and inflation, these token increases amount to real cuts, the first since the Reagan administration.
Bush has also proposed, as he has done before, eliminating or vastly reducing 150 federal programs, But already farmers, veterans groups, mayors, governors and Amtrak supporters are poised to fight cuts in farm subsidies, vets' drug benefits, community development aid, Medicaid and railroad operating subsidies.
So unless the president is prepared to find the veto pen that he lost during his first term (he was the first president since John Quincy Adams, the sixth president, to complete a full term without vetoing a single bill), some of those programs are going to survive congressional scrutiny and the deficit will grow even more.