Job Number One
December 19, 2003
This year's budget deficit will come in at about $480 billion, or 4.4 percent of Gross Domestic Product (GDP) -- fairly modest by post-World War II standards. But the deficit is not shrinking as it should -- not because of dwindling revenues, but soaring spending, says Investor's Business Daily (IBD).
President Bush noted Monday that nondefense, non-Homeland Security related spending will grow only by 3 percent this year. He is a bit too optimistic, says IBD.
- Thanks to budget tricks, spending could grow as much as 9 percent this year, the Heritage Foundation says.
- That is on top of a 21 percent surge in discretionary spending during Bush's first three years.
And more spending is on the way.
There is $400 billion in new spending in the Medicare reform bill just passed; continued hikes in defense spending to fight the war on terror; rising outlays for education; a costly farm bill; and dozens of minor pork items in the budget; which all adds up to a major expansion of government, says IBD.
Bush wants to cut the deficit in half by 2009. A good place to start will be the 2005 budget, which Bush will present to Congress in February.
Can he do it? Surpluses in the 1990s arose after a Republican-led Congress forced discipline on a Democratic president. Spending grew 1.7 percent a year on average. A booming economy erased the deficit.
That's a good model, says IBD. For Bush, cutting runaway spending growth should be priority No. 1. Spending is growing way too fast right now - it's time to cut back.
Source: Editorial, "The New Job One," Investor's Business Daily, December 19, 2003.
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