One sign of how rapidly government spending has been growing in recent years is the $3.1 trillion federal budget President George W. Bush introduced in February.
When Bush took office in 2001, the federal budget was under $2 trillion.
“All in all, the new budget tops off eight years of remarkably spendthrift policies by President Bush,” said Chris Edwards of the Cato Institute. “Over eight years, Bush has presided over a huge, 67 percent increase in total federal outlays. The comparable figure for President Clinton’s eight years was just 32 percent.”
Edwards added, “President Bush promises once again that the budget will be balanced some time down the road, but he again uses phony accounting to make that claim.
“For one thing,” Edwards explained, “he hasn’t accounted for future relief from the alternative minimum tax (AMT), which Congress will surely provide. Also, Bush has not included all the likely future Iraq war costs in his budget.”
The complaint about phony accounting has been echoed by Democrat lawmakers and left-leaning budget watchdogs.
“This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing our skyrocketing debt,” Senate Majority Leader Harry Reid (D-NV) told reporters.
Critics on the left object to proposed reductions in growth for various social programs, such as health benefits for retirees, calling them spending cuts.
“While discretionary funding for defense and homeland security receive an eight-plus percent increase this year, President Bush severely cuts back most other areas of discretionary spending, effectively undermining crucial investments in low- and middle-income communities around the country,” said the advocacy group OMB Watch on its Web site.
Slower Entitlement Growth
Non-defense, non-homeland security programs would grow by 0.3 percent, below the rate of inflation and population growth, OMB Watch noted. The Department of Education would see 47 programs eliminated, and the Department of Agriculture would lose 19 programs.
Larger cuts in future growth would come in entitlement spending, primarily Medicare and Medicaid.
Medicare subsidizes health care for senior citizens and disabled people. Bush proposes to slow growth in spending for this program from an average of 7.2 percent to 5 percent a year. He estimates savings of about $178 billion over five years and $556 billion over 10 years, most of it by reducing payments to health care providers.
Bush also wants to shave costs off Medicaid, a federal-state program that subsidizes health care and nursing home care for 55 million people. The program would slow previously projected spending by about $17 billion over five years. Though the program was designed to serve indigent persons, most states extend eligibility to persons whose incomes are much higher than the poverty level.
Disagreement Over Cuts
While liberals assail the budget for spending reductions, conservatives argue such cuts are necessary.
“Soaring entitlement costs are the top fiscal problem facing our country today and threaten the future of every American,” said Rep. Jeb Hensarling (R-TX), chairman of the Republican Study Committee, a group of more than 100 House conservatives, in a press statement. “We can do more, and we must. I commend President Bush for his commitment to common-sense entitlement reform and stand ready to help.”
Even for Hensarling, though, the budget has problems. But he believes it could be worse.
“Though I believe that the president’s budget request includes too much spending, there is no doubt that Democrats will attempt to spend even more,” Hensarling said.
Steve Stanek ([email protected]) is a research fellow at The Heartland Institute and managing editor of Budget & Tax News.