Bush’s Budget 1: Hoping The American People Are Stupid

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In the message to Congress that accompanied his FY2006 budget, President Bush wrote: “By holding Federal programs to a firm test of accountability and focusing our resources on top priorities, we are taking the steps necessary to achieve our deficit reduction goals.” This is a joke. The President’s budget omits all spending for the wars in Iraq and Afghanistan. It omits the transition costs for his Social Security proposal, costs that even Dick Cheney now admits will require trillions of dollars of new borrowing. It does not include the cost of fixing the Alternative Minimum Tax, which the Tax Policy Center estimates to be around $650 billion dollars over the next decade if the Bush tax cuts are extended, as his budget provides. This is just ridiculous. Anyone can balance a budget as long as they are allowed to simply leave their largest projected expenditures out of consideration.

Moreover, the budget also contains new rules that would make it harder to enforce fiscal discipline in the future. From the Center for Budget and Policy Priorities:

“The Administration proposes that the Congressional Budget Office and the Office of Management and Budget be required to treat extension of the 2001 and 2003 tax cuts as though such extension had already been enacted.  Under this change, when CBO and OMB are asked to provide estimates of the cost of legislation to extend the tax cuts or make them permanent, they would be required to produce estimates showing the cost to be “zero.”  (In reality, CBO estimates that extending the tax cuts and making them permanent would cost $2.1 trillion over the next ten years.  See http://www.cbpp.org/2-2-05tax.pdf.)

This proposal is highly significant, as it would exempt legislation to extend the tax cuts, or make them permanent, from any sort of Congressional budget enforcement.  It should be recalled that the tax cuts enacted in 2001 and 2003 were purposely given early expiration dates so that their costs would be viewed as small enough to fit within the budget targets then in use.  This constituted a rather massive budget gimmick.  Under the Administration’s new proposal, the costs of these tax cuts in years after 2010 would be entirely exempt from any budget control or limits.  (In other words, the costs of the tax cuts after 2010 — and in the case of the dividend and capital gains tax cuts, the cuts after 2008 — would effectively have been placed outside the budget enforcement rules both when the tax cuts were first enacted and when they were extended.)  Such budgetary legerdemain would be unprecedented and would shatter rules designed to promote some modicum of fiscal responsibility.”

Finally, it’s worth noting that Bush’s gesture at fiscal discipline focusses entirely on non-defense, non-homeland security discretionary spending, a part of the budget that makes up a relatively small percentage of overall federal spending, and which has been cut repeatedly over recent years. The Bush budget not only fails to consider repealing any part of his tax cuts, it actually proposes new ones, which (once again) benefit primarily the wealthy (cite). Fiscal discipline is about balancing budgets. You can balance a budget either by raising revenue or by cutting spending. The President’s budget focusses entirely on cutting spending, although, as noted above, it doesn’t even do that. But although taxes are lower as a share of GDP than they have been since the 1950s, raising them seems to be completely off the table.

The President may have his virtues, but fiscal discipline is not one of them. He has presided over one of the biggest fiscal wrecks in US history. He has tried to wage two wars while cutting taxes every year, without any apparent thought about how to pay for them. Now he wants to pretend that he cares about balancing the budget by submitting a budget proposal that leaves some of the biggest areas of federal spending out of consideration, changes the budget rules to make it harder to enforce fiscal discipline in the future, and pretends that one of the two obvious ways of balancing the budget just doesn’t exist. This is a very bad joke on a very serious subject, and oddly enough, I’m not laughing.

21 thoughts on “Bush’s Budget 1: Hoping The American People Are Stupid”

  1. it’s nice, though, that Bush is totally eviscerating the notion that the leadership of the Republican Party gives a flying F about fiscal discipline.
    now if only voters would realize that.
    … which brings up the sad fact that any time anyone says “now if only voters would realize that”, you know it’s never going to happen.

  3. Jes,
    “Can we assume that 49% of American voters did realise it?”
    Much as I would like to, not really. If they did, then you wouldn’t see so many silly stories about Bush’s deep cuts and forceful resolve showing up in the SCLM. After all, a significant percentage of the SCLM likely didn’t vote for Bush.

  4. See, we’ll just grow our way out of deficits once we remove tax cuts, military expenditures, and presidential yachts from the equation, what’s so hard to understand…sacrifice is all about shopping on credit.

  5. It’s amazing how entropy just seems to be accelarating all over, isn’t it?
    Among the items in the budget, BTW, is the final death warrant for the Hubble Telescope. Not only are we too scared to go out there and fix it, but we’re also too cheap to even send a repair robot.
    I really wish I was an engineer, or even an electrician. I’d volunteer to go; I’d volunteer to go for free. (I mean, I’d volunteer *anyway,* but I don’t know how to fix the Hubble, so there’s not much point in sending me.)

  6. Cheney said that we have to leave the cost of Iraq and Afganistan off the budget, because the amounts are not certain. Given this philosophy of accounting, he will have a great future career with the next Worldcom or Enron … oh wait, already been there.

  7. As a Youthful American (soon to be known as The Class of Citizens Left Holding the Smoking Husk Left Over From Bush’s Frigging Insane Budget Policies) this totally appalls me. I couldn’t vote for Bush if he took all of his non-budgetary-related ideas straight from Katherine.

  8. While this is a tremendously important issue, substantively and otherwise, there is just not much more to be said. Bush has proposed a budget which is both unwise and dishonest.
    Why doesn’t the general public understand this? It makes me want to tear my remaining hair out. (Yes, I have more than one remaining hair, but fewer than average)

  9. Talk about “agressive accounting”…Actually that’s not a bad message for the Democrats: the president who wrote this budget cannot be trusted with the future of social security, any more than Andrew Fastow could be trusted to safeguard Enron employees’ pensions.

  10. But most Americans ARE stupid. Most Americans think the federal budget is made up almost entirely of welfare and foreign aid, so it should be EASY to cut some of that stuff and balance it!
    By the way, I suggest that they just move *all* federal spending off-budget, so that not only will we eliminate the deficit, we’ll start running surpluses again. That’s the kind of decisive leadership our God-Emperor Bush will show, by golly!

  11. “He has presided over one of the biggest fiscal wrecks in U.S. history”
    Considering that he was elected to do precisely that, and that the tax cuts were designed to do precisely that, and that Social Security “reform” is designed to do precisely that, and that he is well on his way to fulfilling the conservative grand dreams of fiscal wreck for the rest of the New Deal, I’d say he’s probably very proud of himself.
    “and pretends that one of the two obvious ways of balancing the budget just doesn’t exist.
    He’s not pretending. He has taken taxes off the negotiating table (even to fund the slaughter and the election in Iraq) and has thereby destroyed the table.
    A small (d)emocratic society and its government that removes all possibility of compromise is one that might have the fairly short staying power of various monarchies I can think of in the past who didn’t quite make it.

  12. Via Kevin Drum, Fred Kaplan adds that “Tens of billions of dollars for Army O&M—which includes food, fuel, spare parts, all the perishables that keep an army functioning—are being hidden. The Pentagon is subjecting these billions to a clever bookkeeping trick, taking them out of the FY06 budget and putting them in the “supplemental request” for FY06—or perhaps even for FY05—which will be requested several weeks or months from now.” Likewise, all sorts of costs related to expanding the Army. More dishonesty.

  15. Nor am I surprised that Timmy–on a thread eviscerating Bush on a charge for which there is no defense–was capable of nothing more than content-free snark.
    The question is, what kind of noise can be made about this? I mean, most of the conservatives who post here are honest and, I should hope, consider the fiscal well-being of this country a high priority. After all, the Republicans were considered the party of better fiscal discipline for decades, an image that was once well-grounded. Surely there are some here (Sebastian? Von? Charles?) who understand how indefensible and irresponsible this is, and are willing to write letters to their Republican representatives?
    I’m years past imagining that Bush and the GOP leadership give a rat’s ass what the other half of the country they serve thinks. They hold the reins of power, and that’s all that matters to them. But there’s a part of me that still holds out hope that enough noise from their own base will get their attention.

  16. It does look like there’s some rebellion brewing. The House and Senate Budget Committee Chairs are very unhappy.

  17. After all, the Republicans were considered the party of better fiscal discipline for decades, an image that was once well-grounded.
    Really? who is the last republican President to preside over a balanced budget?
    I’m years past imagining that Bush and the GOP leadership give a rat’s ass what the other half of the country they serve thinks. They hold the reins of power, and that’s all that matters to them. But there’s a part of me that still holds out hope that enough noise from their own base will get their attention.
    a) This administration does not give a damn what you or I think, nor what the Democrats in the legislature think.
    b) I seriously doubt that it gives a damn what Conservatives think.
    c) I suspect that most Bush supporters given a chance to vote for Shrub four years from now would do it again, on the basis that anything is better than a Democrat in the WH.

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