On rare but sublime occasions we can count it a blessing when a major pronouncement by the government encounters universal disbelief. Such is the case with President Bush’s fiscal 2007 budget blueprint, which arrived Monday in Congress to a resounding razz. Wall Street and conservative Republicans alike called the budget fiction and declared it dead on arrival.
That has to be good news for Arkansas, which would export billions of federal dollars to the eastern and western seaboards and the southwest over the next decade if Congress were to embrace the president’s priorities.
Arkansas gets a smaller per-capita share of military and homeland security procurement dollars than almost every state but a higher quotient of federal outlays for healthcare, education, agriculture, veterans and environmental protection. Bush would dramatically increase the first and slash the others on the way to running up the largest deficits in history over the next 10 years.
Mr. Bush has sizable majorities in Congress but they are not large enough to accomplish that feat. Republican congressmen — well, senators anyway — have hearts, too. How many will vote to eliminate the $255 death benefit of pensioners, in an election year? The president is determined to get rid of that sop to widows this year.
Last year, he tried to slash the survivor benefits for families of workers who die before retirement by nearly 10 percent to offset his tax cuts to millionaires. Even Republican lawmakers would not go along, and they won’t on this either.
We doubt they will go along either with hefty cuts that the president proposed in subsidies to Arkansas farmers, environmental cleanup and protection, Medicare and Medicaid, vocational education, low-income housing for the elderly, heating assistance for the poor or with the higher co-payments and fees that he would charge non-combat disabled veterans for medical care.
Those cuts are a small part of Bush’s $2.77 trillion budget for fiscal 2007, but they seem especially cruel when their purpose is to soften, if ever so slightly, the effect of the president’s truly big initiatives: to make permanent the gigantic cuts in taxes on wealthy investors and corporations that he and the Congress enacted in 2001-2004 and to vastly increase outlays for munitions and hardware and homeland security procurement, the largest bonanza for the defense industry in a quarter-century.
The president’s budget document trumpets that the domestic spending cuts would shave $65 billion off the deficits the next five years. The deficits are an embarrassment to the president’s party, which likes to be known as the party of fiscal responsibility. It controlled all three branches of government in the five years when government turned from big budget surpluses to mammoth deficits. You may recall that when President Bush took office in 2001 the Congressional Budget Office forecast surpluses totaling more than $5.6 trillion between 2002 and 2011. Now the budget office is forecasting deficits totaling $2.2 trillion between Oct. 1 and 2011.
Mr. Bush’s case for the specific program cuts and increases would have been better if his fiscal blueprint had not startled everyone by its fantasies.
He said his budget would bring the federal budget under control again by the end of the decade, two years after he leaves office.
The assumptions underlying that bit of fiscal legerdemain are that (1) the wars in Iraq and Afghanistan will end, completely, next year and not a dime would be spent after that, (2) the alternative minimum tax, once intended to catch multimillionaire tax scofflaws, will be allowed to kick in and nail millions of middle-class taxpayers with huge tax bills annually starting next year and (3) Congress on its own will make big cuts in domestic spending each year after 2007. (His zeroing war expenditures after 2007 is especially fascinating. Are we being told subtly that he will, after all, follow Rep. John Murtha’s advice and end the occupation of Iraq in quick stages? Not likely.)
Match those assumptions with the president’s call to Congress to make permanent his tax cuts for the wealthy, which are due to expire between 2007 and 2011. That would cost the treasury an extra $1.35 trillion over the next decade.
A budget under control in 2011?
“Unrealistic,” Goldman Sachs told its investor clients yesterday.
“This budget is not going to happen,” said Stanley E. Collender, a federal budget analyst at Financial Dynamics Business Communications. “Of all the budgets I’ve seen recently, this is the one going nowhere the fastest.”
Let us hope.
