Money-Grubbing Games
The New York Times
February 8, 2002
By PAUL KRUGMAN
First there is a promise. Then
there is no promise. Then
there is a promise - until your
attention is diverted again.
In the immediate aftermath of
Sept. 11, before George W. Bush
began his stratospheric ascent in
the polls - and just before his first post-terror visit to New
York - he made a personal promise: The city would
receive at least $20 billion in reconstruction aid. At the
time everyone thought that was a floor, not a ceiling.
Then a funny thing happened: Only $11 billion in aid to
the city was actually budgeted. I wrote about this in a
column last November titled "The 55-percent solution" -
but was lambasted by critics, who insisted that of course
Mr. Bush would honor his promise.
Now we have the Bush administration's $2.1 trillion
budget proposal. Strange to say, it contains no additional
aid to New York. It seems that the bucks stop here, at 55
percent of the original commitment.
New York legislators were quick to react, and demanded
that Mitch Daniels, the White House budget director,
explain the absence. Mr. Daniels first responded that he
intended to count $5 billion in relief to victims of Sept. 11
as part of the aid package - a clear violation of everyone's
understanding of what the promise meant. Then he
lashed out at New York's representatives, saying, "It's
strange to me to treat this as a little money-grubbing
game."
The White House quickly tried to undo the damage. Mr.
Daniels retracted his remarks, and Mr. Bush reiterated
his promise to provide $20 billion - just in time to have
another photo op with New York police officers and
firefighters. But the money is still not in the budget. And
that fact - together with the fact that Mr. Daniels's initial
remarks surely represented his true feelings - says
volumes about the administration's priorities.
To place the stiffing of New York in context, you need to
realize that when it comes to tax cuts and military
spending, the Bush administration's budget is an exercise
in unrestrained self-indulgence. There is a lot of stirring
rhetoric, warning the nation that this is a time of war, in
which everyone must make sacrifices - but this austerity
does not extend to the wealthiest few percent of the
population, who will not only get the lion's share of the
future tax cuts already written into law, but would get
most of the additional $600 billion in tax cuts the
administration now proposes. (Actually it's about $1
trillion without the accounting tricks, but who's
counting?)
And while there is much talk of hard choices, the
administration seems loath to make any choices at all
when it comes to defense spending. Does a subsidiary of
the Carlyle Group have a 70-ton artillery piece that made
sense, if it ever did, only in the cold-war era? We'll buy it.
Do two competing contractors offer advanced fighters
designed to fight a nonexistent next generation of MIG's?
We'll take both.
But there are big cuts elsewhere, and big diversions of
resources that will force future cuts. You know about the
diversion of the Social Security surplus to cover deficits in
the rest of the government - deficits that would be much
smaller if the administration would forgo some of those
tax cuts, and would vanish if it also exercised some
restraint in its weapons purchases. But did you know that
the administration has budgeted $300 billion less for
Medicare than the Congressional Budget Office says is
needed to maintain current benefits - never mind
add-ons like prescription drug insurance? It's unclear
whether the administration actually intends to deny
medical care to retirees, or is simply trying to hide the
sheer scale of the looming fiscal disaster.
The broken promise to New York is actually small change
compared with all of this. And that, in a way, makes it
puzzling. Since the budget is already deeply in deficit for
the foreseeable future, why not put it another $9 billion
in deficit for one year, and avoid offering critics such an
easy target?
One answer is that terror or no terror, key Republican
lawmakers retain an abiding dislike for the Big Apple -
and this administration never offends its supporters on
the right.
But my guess is that it comes down to sheer arrogance.
Buoyed by those approval ratings, this administration
simply believes that its former promises don't matter.
After all, don't people know that there's a war on?
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