NCPA - National Center for Policy Analysis


February 13, 2008

The $3.1 trillion budget submitted last week by President Bush, with a projected $407 billion deficit for 2009, reminds us of the huge gap between uplifting political rhetoric and the grim realities of governing.  Budgets are not just numbers.  They express political choices.  What should government do and who should pay?  The reigning philosophy, practiced by both parties and largely approved by the public, is to evade choices, says columnist Robert J. Samuelson.

  • Since 1961, the federal government has run deficits in all but five years; only the surplus of 1969 stemmed from deliberate policy: a 10 percent income surtax reluctantly passed by Congress in 1968.
  • The others (1998-2001) mostly reflected good fortune: the end of the Cold War, resulting in a 40 percent drop in defense spending as a share of the economy, and an unexpected surge in taxes from the economic boom.
  • Neither was a policy act of the Clinton administration or the then-Republican Congress.

Bush says his policies would produce a balanced budget by 2012, but his underlying assumptions are artificial, says Samuelson:

  • He omits most of the future costs of the Iraq war (for budgeting, he effectively adopts his critics' plan of rapid withdrawal).
  • He assumes big savings in Medicare by freezing reimbursements to doctors and hospitals -- a policy Congress won't adopt.
  • He doesn't offset the growing revenue bite of the alternative minimum tax (AMT) that would result in a sizable tax increase -- an outcome Bush rejects.

The only way Bush could balance the budget would be by not following Bush's policies.  The most telling figures in his budget involve his proposal to eliminate or dramatically reduce 151 programs, for a savings of $18 billion.  That's six-tenths of 1 percent of federal spending.  What's telling, though, is that Congress will probably reject even many of these proposal, says Samuelson.

Source: Robert J. Samuelson, "The $3 Trillion Cop-Out," Washington Post, February 13, 2008.

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