The Nation

Analysts Say Bush's 'Lean' Budget Is Bound to Swell

For every dollar saved by capping outlays, far more would be spent by the expanding cost of initiatives launched or OKd by the president.

February 10, 2005|Warren Vieth and Joel Havemann | Times Staff Writers

WASHINGTON — As he launches a nationwide campaign in support of his proposed 2006 budget, President Bush is promoting spending restraint as the "first pillar" of his economic policy.

"It is a budget that is lean and effective and says we'll spend money on programs that work," Bush said Wednesday during a forum on legal reform.

Yet for every dollar the president would save by capping outlays or consolidating programs, far more dollars would be consumed by the expanding cost of big-ticket initiatives either launched or approved by Bush, independent analysts say.

"It's true that by some standards this is the tightest budget that Bush has submitted. But that's not much of a standard," said David Boaz, vice president of the libertarian Cato Foundation.

"They spend like drunken sailors for four years, and then say, 'We're only going to spend a little more this year,' " he said.

The apparent mismatch between the president's tough talk and the budget's continued growth was underscored Wednesday by reports that the Medicare prescription drug benefit Bush helped push through Congress in 2003 would cost nearly $724 billion over the next decade.

The new estimate mostly reflects a shift in the years used to calculate the cost, with the low-cost years of 2004 and 2005 dropped and the high-cost years of 2014 and 2015 added.

Yet the new figure came as a shock to some lawmakers. They recalled that the GOP-led House reluctantly approved the drug benefit after being assured that the 10-year price tag would be $400 billion, a figure the White House later revised to $534 billion.

"Now we're stuck with this wildly expensive program that was presented with a false price tag," Boaz said. "I hope House Republicans have learned a lesson."

To back up his claim that his budget is the most austere since the Reagan administration, Bush says he has targeted 150 federal programs for elimination or deep cuts. The savings would be $20 billion next year -- slightly less than 1% of total federal spending -- and many of the cuts are repeats of proposals that Congress has rejected before.

Bush's 150-program hit list is an exercise in "budgetary theater," said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan budget watchdog group. "The political pain isn't worth the fiscal gain."

Lawmakers and analysts across the political spectrum said the problem confronting Bush was that the combined effect of the spending restraint he was proposing would be dwarfed by the long-term cost of other White House initiatives.

Some, such as making Bush's past tax cuts permanent at a cost of $1.1 trillion over 10 years, were reflected in the president's new budget. Others, such as allowing younger workers to divert part of their Social Security payroll taxes into private investment accounts at a cost of $754 billion over the first decade, were not.

"The record would indicate so far that President Bush has been the least fiscally conservative and the most fiscally profligate president in recent memory," said Robert Greenstein, executive director of the nonpartisan Center on Budget and Policy Priorities.

"Every president and administration presents their budgets in a rosier light than the budgets deserve," he said. "But the gap between the White House rhetoric and the reality surrounding this budget surpasses that of any other recent administration."

Bush's budget for the fiscal year beginning Oct. 1 calls for total federal spending of $2.57 trillion, an increase of $89 billion over this year's outlays. It projects a deficit of $390 billion in 2006, a figure that does not include the expected costs of war and reconstruction in Iraq and Afghanistan. The White House expects a deficit for the current fiscal year of $427 billion, including the costs of those military actions.

To back up his promise to tighten the federal purse strings, Bush said he wanted Congress to reduce spending on discretionary domestic programs outside of defense and Homeland Security by 1%. Those cuts are in programs, such as environmental protection and housing assistance, that occupy less than a fifth of the total federal budget.

Bush also proposed changes in mandatory entitlement programs such as Medicaid, which provides healthcare to the poor, that would save an estimated $147 billion over the next decade. But those reductions, while substantial, add up to far less than the cost of the Medicare drug benefit or Bush's tax cuts.

The difficulty of making a big dent in federal spending is illustrated by the president's proposal to scrap or scale back 150 federal programs.

The total savings -- $20 billion -- would scarcely be noticed in a $2.57-trillion budget. And if the past is any guide, Congress will reject most of the cuts.

In the Education Department, for example, 48 programs are targeted; 34 of them survived proposed cuts last year. Each program has supporters outside the government who lobby for its continuation, and most have congressional champions as well.

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