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THE RACE FOR THE WHITE HOUSE

Bush's Cut-and-Spend Plan Is Math-Challenged

Even allies say it would be nearly impossible to reduce the deficit while expanding programs.

September 19, 2004|Janet Hook and Warren Vieth | Times Staff Writers

WASHINGTON — To hear President Bush talk about his plans for a second term, voters might think that the era of big government spending is back.

From his proposal to overhaul Social Security to his commitment to fighting terrorism and his initiatives on health, education and job training, the agenda Bush is spelling out in speeches and campaign documents calls for the robust use of government money.

All this comes from the same candidate who promises to cut the federal budget deficit in half by 2009 and whose Cabinet agencies are preparing for some serious belt-tightening of domestic programs if he is reelected.

That mixed message -- a smaller deficit, but costly new initiatives -- may have more appeal to swing voters than the simpler message of old-fashioned conservatism, which calls for smaller government and less spending.

But many analysts say Bush's second-term promises may be a poor predictor of what he could actually accomplish. Even some administration allies say it would be nearly impossible for Bush to achieve all his ambitious objectives and still halve the deficit by 2009.

"Can it be done?" said G. William Hoagland, top budget aide to Senate Majority Leader Bill Frist (R-Tenn.). "Sure. On paper. But politically it's very difficult."

To do it all, Hoagland said, "lots of other things would have to be eliminated, terminated."

The result: Unlike Bush's 2000 campaign platform -- whose major elements of tax cuts, school accountability and prescription drug subsidies for the elderly were enacted -- his 2004 promises may have to be sharply scaled back or abandoned if he wins a second term.

Bush has made a big issue of arguing that Sen. John F. Kerry's health and education campaign promises do not square with his promise to reduce the deficit. Bush argues that his Democratic rival would have to raise taxes or add to the deficit to enact his spending plans.

But if he wins reelection, Bush will have tough choices of his own. Some analysts predict that much of his agenda would wither if he achieved what seemed to be his top priority: making permanent the tax cuts enacted in his first term. Doing so would cut government revenue by more than $1 trillion between 2005 and 2014.

"The one sure thing that will happen if he becomes president is the tax cuts will be permanent," said Mark Zandi, chief economist at Economy.com, a forecasting company in West Chester, Pa. "That will result in large, persistent budget deficits, so he will not be able to follow through on his other pledges."

Bush has repeatedly pledged that in five years, he would halve the deficit -- measured as a share of the U.S. economy -- from this year's expected peak of $521 billion, which amounts to 4.5% of the gross national product. That means Bush is aiming for a deficit of about $260 billion, or 2.25% of the GNP, in 2009.

But that goal may already be out of reach, according to the latest figures from the nonpartisan Congressional Budget Office, which provides economic analysis to Congress. Unless current tax and spending policies change, the CBO projects that the deficit will be about $312 billion in 2009.

Chad Kolton, a spokesman for the White House Office of Management and Budget, disputed the CBO's estimate, saying it assumed a higher long-term level of spending for operations in Iraq and Afghanistan than was reasonable. On the other hand, the CBO figure does not include the costs of making Bush's tax cuts permanent or other elements of his second-term agenda.

Even many Republicans are skeptical that Bush can -- or will try particularly hard -- to stick to his deficit reduction promise, because it probably would require a level of spending restraint with no precedent in modern times.

"I don't think he's that philosophically committed to deficit reduction if it involves politically painful choices," said Steve Moore, president of the Club for Growth, a Washington political group that advocates for lower taxes and smaller government. "He hasn't talked about any program he would want to cut."

The only part of the budget easily controlled every year by Congress and the president is discretionary spending, which covers programs from the Pentagon to school aid to law enforcement. The cost of mandatory programs -- such as Medicare, welfare and food stamps, which pay out benefits to anyone who is eligible -- can be changed only if Congress alters those programs' basic structure.

White House budget plans call for cutting overall funding for discretionary spending, other than for domestic security, by about 12% over five years, according to an analysis by the Center on Budget and Policy Priorities, a liberal research group in Washington.

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