President Bush’s $2.9 trillion budget rests on several optimistic — many would say unrealistic — assumptions.
One assumption — that Congress would embrace the president’s proposals for divvying up the federal pie — was quickly dashed. The chairman of the House Budget Committee, Rep. John Spratt, D-S.C., warned, “I doubt that Democrats will support this budget and, frankly, I will be surprised if Republicans rally around it, either.”
Spratt is right about the Republicans. They were unable to agree on a budget last year when they controlled Congress, and this budget is quintessential Bush in that it preserves his priorities — tax cuts, defense spending — while basically freezing Congress’ own pet programs. This will not make for an easy year.
As has become a ritual, Bush is promising to balance the budget in five years, even calling for a $61 billion surplus, but he assumes the Alternative Minimum Tax, which Congress patches almost annually, will be patched only once in that time. The White House concedes the AMT is “misguided policy,” but keeping it from hitting more middleclass Americans eats away at the budget.
The president also is seeking to save $78 billion in Medicare and Medicaid by holding down the rate of increase in those programs. This will be painted as a “cut” by opponents, but the White House points out that three times in the 1990s limits were placed on the growth of those programs and the nation somehow survived.
Bush would be even tougher on “non-security discretionary spending” — that’s the whole rest of the government, except for defense and homeland security — holding increases to less than the rate of inflation, which, in effect, really is a cut.
This budget does something that should have been done much earlier and includes spending on Iraq and Afghanistan as part of the regular budget and not as a series of lessscrutinized one-shot emergency spending bills.
The White House budgets $141.7 billion for those wars in fiscal 2008, less than the $170 billion for the current year. Curiously, the administration budgets only $50 billion for Iraq and Afghanistan in fiscal 2009, but budget director Rob Portman cautions against reading strategic significance into that.
The budget was accompanied by the usual gloomy charts showing government revenues being swamped by Social Security, Medicare and Medicaid, which already account for more than half of all spending.
Bush extended an offer to work with Congress to forestall the impending tsunami of red ink. He offered to meet with the lawmakers with no preconditions, and to put all options on the table. The possibility that this might work could be the most optimistic assumption of all.