- The Washington Times - Wednesday, February 9, 2000

President Clinton really does plan to spend it all. His fiscal 2001 budget, which the White House released Monday, is a compendium of tax-and-spend liberalism in the finest tradition of the Great Society and the war on poverty.

After setting aside over the next 10 years an estimated $2.2 trillion in Social Security surpluses, which will be used to reduce by a like amount the $3.7 trillion portion of the national debt held by the public, Mr. Clinton will spend virtually every additional dime on domestic spending initiatives. He offers scraps in the form of tax relief. With federal tax revenues commanding 20.4 percent of gross domestic product (GDP) in the current fiscal year, more than at any time since 1944, Mr. Clinton's budget is an insult to the nation's taxpayers.

Against projected total tax revenues of $10.8 trillion over the next five years, Mr. Clinton's budget offers a net tax cut of $10 billion, or less than one-tenth of 1 percent. Over 10 years, when cumulative revenues will exceed $24 trillion, the president has found room for a minuscule $170 billion in net tax relief, or a mere seven-tenths of 1 percent. Moreover, Mr. Clinton's 10-year net "tax cut" of $170 billion includes $53 billion to establish "retirement savings accounts," a massive income-transfer scheme masquerading as a tax cut, and more than $20 billion to expand the Earned Income Tax Credit program. Mr. Clinton's proposal to alleviate the marriage penalty is pathetic. According to the Congressional Budget Office (CBO), more than 20 million married-couple families pay an average of $1,400 per year in higher federal income taxes than they would pay if the couples were living together unmarried. That makes it a $30 billion annual problem. For the next five years, Mr. Clinton's budget proposal would offer cumulative relief of less than $10 billion.

On the spending side, Mr. Clinton's budget is far more generous. Consider how the growth rate of spending has changed in a single year. Last February, five months before the CBO released its revised and expanded estimates for non-Social Security surpluses, the president's fiscal 2000 budget projected an average annual increase of 2.9 percent in spending for the 2001-2005 period. This year, the annual spending growth rate for that same period has accelerated to 3.8 percent, relative to the president's fiscal 2000 budget spending proposal. In other words, the president made a conscious decision to spend like a drunken sailor.

As the White House has made clear with innumerable announcements since the first of the year, virtually all of that new spending is directed toward domestic programs. The president's budget would toss an additional $299 billion during the next decade at an essentially unreformed Medicare program. Mr. Clinton would also drastically expand Medicare benefits by adding a prescription-drug subsidy and permitting 55-year-olds to "buy in" to Medicare. The president's budget estimates those two "reforms" would cost an additional $168 billion over 10 years, but that is a lowball estimate that will surely be overwhelmed by reality.

Mr. Clinton has once again thumbed his nose at national defense. In 2001, for the first time since the year before Japan attacked Pearl Harbor, America's defense spending will fall below 3 percent of GDP if Mr. Clinton gets his way. While outlays for non-defense domestic spending increase well above the rate of inflation, Mr. Clinton's budget calls for inflation-adjusted defense spending to be less than fiscal 2000 during each of the next three years.

This budget reads like a Gore-for-President political ad. Democratic voters and interest groups will no doubt be cheering, getting the gold mine as they do. Meanwhile the American taxpayer will get the shaft, again.

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