Despite Rhetoric, Bush Budget Cuts Little, Spends a Lot

Published April 1, 2005

Taxpayers will find many items to praise and more than a few to pan in President George W. Bush’s Fiscal Year 2006 budget, according to an analysis released by the National Taxpayers Union (NTU).

“Despite the budget’s stated goal to ‘accomplish more with less,’ by most measurements Washington will both get more and spend more in the coming years,” said NTU Senior Policy Analyst Demian Brady, who conducted the research.

Among Brady’s findings:

  • Federal receipts are projected to grow by 50 percent from Fiscal Year 2004 ($1.88 trillion) to FY 2010 ($2.82 trillion). Meanwhile, outlays will rise by nearly one-third between 2004 ($2.29 trillion) and 2010 ($3.03 trillion). Adjusting for inflation, outlays would still jump by 14.2 percent.
  • Revenues are projected to consume a larger share of the nation’s economic output (GDP), from 16.3 percent in 2004 to 17.7 percent in 2010. Over that period, outlays would eventually fall as a share of GDP, from 19.8 percent to 19.0 percent (after peaking in 2005 at 20.3 percent).
  • Of the 15 cabinet-level departments, six would receive increases in their discretionary budgets totaling $28.1 billion for 2006, while nine would receive reductions totaling $9.6 billion for the year.
  • Based on the administration’s own projection of the Consumer Price Index change in 2006, nine of the 23 cabinet and other major agencies would still receive discretionary funding increases higher than the estimated rate of inflation.
  • While discretionary agriculture spending would take a significant cut of $2 billion in the president’s budget, expenditures in this area would still be twice as high as they were in the year immediately following enactment of the 1996 Freedom to Farm Act ($8.89 billion in 1997 vs. $19.4 billion for 2006).

Would Kill Amtrak Subsidy

The budget proposes to terminate subsidies for Amtrak, although $350 million in other taxpayer funds would still have to be set aside to meet the railroad’s obligations. Since Amtrak’s creation in 1971, Congress has provided it with roughly $29 billion in direct subsidies.

Although the administration has said it plans to reduce expenditures on Cold War weapons systems, the budget tables provide confusing presentations on a forthcoming “supplemental” request, mainly for Iraq War funds (estimated at $81 billion). Some tables list an allowance for this request, while others do not.

New Taxes Proposed

While extending many of the 2001 and 2003 income tax reductions, the budget proposes increases in other types of taxes, such as new inspection and security fees on air travel. The average tax burden on a $200 round-trip airline ticket will be 26 percent, a higher effective rate than many middle-class travelers pay on their 1040 income tax forms.

Brady conducted a line-by-line cost analysis of Bush’s State of the Union address for NTU’s research affiliate and found the president had proposed a total of $12.8 billion in additional yearly federal spending–the smallest increase among the six most recent State of the Union addresses.

“The Fiscal Year 2006 budget looks leaner than those the Bush administration proposed in previous years, but Washington’s waistline will still grow noticeably due to numerous spending programs with an unhealthy appetite for tax dollars,” Brady said.

Peter J. Sepp ([email protected]) is vice president for communications with the National Taxpayers Union Foundation, the nonpartisan research arm of the 350,000-member National Taxpayers Union.

For more information …

FY 2006 budget documents are available online at