2-18-05

Bush Budget—
Reverse Robin Hood
Cuts For Working Poor, Middle Class; Cream For Fat Cats
By Paul Rosenberg, Senior Editor

     Budgets are moral documents,” evangelical leader Jim Wallis remarked in response to Bush’s recently released budget. “The cost of the deficit is increasingly borne by the poor.”
     From food stamps to veterans’ health care to education to Medicaid, the new Bush budget slashes programs that help the elderly, the poor, the disadvantaged, and those who have risked their lives for their country. But the budget cuts—$350 billion overall, targeting 150 programs for deep cuts or total elimination—are overwhelmed by the combination of more tax cuts and military spending. As a result, the deficit actually grows over the next five years, above what it would otherwise be.
     Wallis is a founder of Sojourners, a Christian ministry devoted to integrating spiritual renewal and social justice, and executive editor of Sojourners magazine. He may be a theologian, but the numbers are there to back him up, underscored in a series of reports from the Center on Budget Policy and Priorities (CBPP), a think-tank that looks at budget policies and their impact on low to moderate income Americans.
     The Bush narrative stresses two themes. First, Bush claims he’s cutting the deficit in half in five years. But his total mix of policies actually increases the deficits compared to baseline projections. Second, Bush says he’s targeting programs that don’t work. But a new report from Texas A&M shows again that teens have more sex after taking abstinence-only programs—a Bush favorite slated to get about $130 million in 2005—while proven programs are being slashed.
     For example, Bush proposes cutting off food stamps for 200,000 to 300,000 people. Total savings over 10 years: $1.1 billion. Less than we spend in Iraq in a week.
     At the same time, Bush proposes new tax cuts costing more than ten dollars for every penny cut in food stamps—$1.4 trillion over 10 years, $1.6 trillion counting interest.
     “Low-income people should not be punished for decisions that placed us in financial straits,” Wallis warned. “Rather than moving toward a ‘living family income,’ the budget stifles opportunities for low-income families, which are vital for national economic security.”
     Indeed, “By 2010,” according to the CBPP, “discretionary spending outside of defense and homeland security would be cut by $65 billion, or 16 percent.”
     Bush’s claims that cuts are needed to lower the deficit are refuted by his own budget figures, noted CBPP economist Richard Kogan.
     “Their phrase is we are cutting the deficit. That is a cause-and-effect lie,” Kogan said. Economic growth and projected troop reductions in Iraq are expected to lower the deficit even more than Bush proposes, Kogan explained. Thus, the deficit would be even lower “in the absence of any legislation,” he noted. As a result, the five-year deficit grows from $1.364 trillion to $1.393 trillion—again, more than ten dollars for every penny cut in food stamps.
     In contrast to the cuts, Kogan noted in a report he co-authored, the total cost of Bush’s tax cuts—proposed and already passed—will be $2.45 trillion in 2006 through 2015, plus interest. Another $700 billion is expected to extend middle class exemptions from the Alternative Minimum Tax, which Bush hasn’t budgeted, although everyone expects it to pass.
     Underlying Bush’s slashing of social programs is the false implication that they are responsible for the existing deficit. But the report, “What The President’s Budget Shows About The Administration’s Priorities,” goes on to refute this notion, stating that, “the primary reason for the change from surplus in 2000 to the deficit in 2005 is lagging revenues.”
     Clinton left a surplus in 2000 of 2.4 percent of GDP, while the 2005 deficit is projected at 3.3 percent of GDP—a plunge of 5.7 percent. Revenues fell by four percent, accounting for 71 percent of the drop. That’s all the deficit and more—121 percent of it, to be exact. Instead of reversing course by rolling back tax cuts—or even just canceling those yet to take effect—Bush’s new tax cuts will only make matters worse.
     But the budget numbers aren’t the worst part of the story. Bush is also proposing procedural changes to institutionalize his bad priorities, the subject of another CBPP report Kogan co-authored, “Administration Proposals To Change Budget Process Have Strong Ideological Cast.” The report cited eight proposals in two main groups—those favoring tax breaks and crippling future spending, and those shifting power away from Congress and toward the President.
     The most shocking proposal—dubbed “budgetary legerdemain” [deceit] by CBPP—would require that the cost of extending the tax cuts (or making them permanent) be counted as “zero.” This would disappear $2.1 trillion of debt over the next ten years. We’d still have to pay it, of course. We just won’t count it against Bush’s record. Nor would it be subject to “Congressional budget enforcement,” CBPP notes.
     “[T]he 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 the years after 2010 would be entirely exempt from any budget control or limits.”
     Bush also wants to institute a line-item veto—despite the fact the Supreme Court already ruled it unconstitutional. And he wants to change the rules so that spending increases must be offset by spending cuts—to make them revenue neutral—while tax cuts, free from offsets, can continue to balloon the deficit. If adopted, these rules would mean that children needing food stamps would forever be pitted against veterans needing health care, while millionaires could come back year after year looking for another tax break.