The Bloated Budget:
"Many good Americans who get their news from the major media have the impression that President Bush is trying to cut back on the total cost of government following its mercurial rise under the administration of Bill Clinton. Many may even think that he is succeeding, at least to some degree. But the record shows otherwise. In a February 22nd press conference, Bush made clear that he was not trying to cut the budget in the absolute sense, but was merely after a cut in the rate of increase:
Let me remind you, and the people who are listening, that accounting in Washington is a little different than the way … the average person accounts. This is a town where if you don’t increase the budget by an expected number, it’s considered a cut.
We’re going to slow the rate of growth of the budget down. It should come to no surprise to anybody that my budget is going to say loud and clear that the rate of growth of the budget, for example, from last year, was excessive. And so we’ll be slowing the rate of growth of the budget down. That, evidently, is a cut. In my parlance, it’s not a cut — when you increase spending, it’s not a cut.
Later that month, Bush sent Congress a budget proposal entitled A Blueprint for New Beginnings, and in April he submitted his more detailed (and slightly revised) Budget of the United States, Fiscal Year 2002.* The latter document calls for federal outlays of $1,961 billion in 2002 as compared to $1,856 billion in 2001 — an increase of 5.7 percent. By comparison, the data in the Historical Tables released by the Bush White House shows that federal outlays increased by 3.0 percent from 1998 to 1999; by 5.0 percent from 1999 to 2000; and by an estimated 3.7 percent from 2000 to 2001. Thus, according to Bush’s own budget proposal, he is advocating an increase in the rate of spending as opposed to a decrease.
The Historical Tables also show federal outlays in terms of 1996 constant dollars. Even by this measuring stick, Bush is proposing an increase in federal outlays compared to the Clinton years ($1,730 billion in fiscal 2002, for instance, as compared to $1,678 in 2001 and $1,659 in 2000). In the past, Bush has correctly pointed out that Clinton and Gore wanted to spend far too much taxpayer money. Yet he proposes to spend even more money than was spent during the Clinton-Gore presidency.
In his February 27th address to Congress, Bush said his budget plan "is reasonable, and it is responsible." He continued: "It meets our obligations, and funds our growing needs.... We’ve increased spending for discretionary programs by a very responsible 4 percent, above the rate of inflation." Increasing spending for such programs faster than the rate of inflation is probably not what most people who voted for Bush had in mind. In terms of outlays, however, Bush’s budget proposal would actually increase "discretionary" spending by 6.6 percent from 2001 to 2002. Bush was able to use the lower 4 percent figure by basing his calculation on budget authority. (Outlays, which flow from budget authority, represent actual spending.)
Bush also called for paying down the national debt in his February 27th speech: "Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history."
Bush’s budget proposal does project a $2 trillion pay-down over 10 years — in the federal debt held by the public. The gross federal debt includes not just the debt held by the public but the debt held by government accounts. In Bush’s budget proposal, the latter category of debt increases by a greater amount than the former decreases. Specifically, his budget proposal estimates that the gross federal debt will be $7,160 billion at the end of fiscal 2011 as compared to $5,625 at the end of fiscal 2001. Yet, because of the federal government practice of borrowing money from government accounts such as the social security trust funds and then treating the IOUs as assets, Bush is able to claim huge budget surpluses even as total indebtedness goes up.
Bush did, at least, promote a fiscally conservative program by advocating and getting a tax cut. But even though this relief is welcome, it does not mean that the government’s burden on taxpayers will be reduced in the overall sense. First of all, Bush’s budget proposes annual increases in federal receipts (revenues) for every year from 2002 to 2011. Secondly, the only true way to cut the cost of government is to cut spending, since whatever cost that is not paid directly will still be paid indirectly through the bad effects of federal borrowing." |
