A cartoon in the Louisville (Ky.) Courier-Journal shows President Bush beside a bloated hog, which has a dotted line down its middle. In the first panel, he tells onlookers, “We're going to cut the deficit in half in five years.” In the second panel, he says, “Your kids will pay this half and your grandkids will pay this half…”
It is interesting how the party that has so long espoused fiscal conservatism and lambasted “tax-and-spend” policies of the Democrats has become the biggest spender in history, piling debt on top of debt.
But, they cut taxes, right?
Hmmm, well, the much-vaunted tax cuts, estimated to cost $2.2 trillion over 10 years, were based on federal revenue estimates that were knocked out of kilter by the recession. Nobody knows if those revenue projections will ever materialize. Tax cuts or no, there is a potential Damocles' sword for many taxpayers in the years ahead with the alternative minimum tax. Established originally to keep wealthy investors from evading taxes, it now affects about 2 million to 3 million high income people. But by 2009, unless changes are made, it's projected that the AMT will hit as many as 40 million people with higher tax bills, including a lot of $50,000 and under wage earners.
Even Republicans are grumbling about the $2.4 trillion fiscal 2005 budget just sent to Congress and the record $521 billion deficit it entails.
Not to worry, we're told, the plan is to halve that deficit by 2009. But those who've analyzed the grand plan say it's mostly smoke and mirrors — that the projections conveniently omit a number of costs that should be added back in order to gain a realistic sense of coming-years deficits. Once these missing costs are factored in, analysts say, the deficit will be nearer $500 billion in 2009, far short of the touted 50 percent reduction.
“Even if the deficit is reduced somewhat in the next few years,” say Richard Kogan and Martha Coven of the Center on Budget and Policy Priorities, “deficits will again begin growing substantially after that, and will eventually reach economically unsustainable levels.”
But hey, the president will have completed his second term and will be out of office by then, so it'll be somebody else's problem (spelled t-a-x-p-a-y-e-r).
To maintain projected spending, defense buildups, and tax cuts, analysts say if the administration is to make any headway on deficit reduction, it will require major across-the-board cuts in government programs — from as much as 15 percent to 33 percent.
You can bet one of the places they'll look first is agriculture programs, a perennial target for the knife-wielders. USDA's budget authority for 2005 would be cut by 8.1 percent ($1.7 billion) compared to 2004 and 12 percent compared to 2003. The cuts, the largest of any cabinet-level department, would affect mostly research and conservation programs (the latter already so under-funded that farmers wanting to participate can't get in). Major cuts are also proposed for education, environmental programs, and others.
But wait: This is election year, which means all bets are off on spending. Open the Treasury doors and let the money flow. Just give the bills to our children and grandchildren.