- The Washington Times - Monday, February 7, 2005

Yesterday, President Bush unveiled his spending plan for the fiscal year that begins Oct. 1. The 2006 budget forecasts that federal spending will exceed $2.5 trillion for the first time. Meanwhile, despite the fact that the 2006 budget “does not reflect the effect of undetermined but anticipated supplemental requests for ongoing operations in Iraq and Afghanistan beyond 2005,” the fiscal 2006 budget deficit is projected to total $390 billion. Thus, once military costs for Iraq and Afghanistan are incorporated into the 2006 estimates, it will be clear that the budget deficit will continue to increase, rising from $158 billion (2002) to $378 billion (2003) to $412 billion (2004) to a projected $427 billion (2005) to a probable $460 billion (or higher) for 2006.

The president’s budget does offer a good-faith effort to begin to put the brakes on discretionary spending for non-defense and non-homeland security programs. And it represents a first step in addressing the runaway spending in the Medicaid entitlement program. Nevertheless, 21 minutes after the budget was officially released, The Washington Post published a story on its Web site foreshadowing the level of uncontrolled screeching and disingenuous whining that will likely occur throughout the budget-making process.

Two points in The Post’s story deserve attention. In the second paragraph, The Post reports that “discretionary spending other than defense and homeland security would fall by nearly 1 percent, the first time in many years that funding for the major part of the budget controlled by Congress would actually go down in real [i.e., inflation-adjusted] terms.” Well, not quite. From fiscal 1995 through fiscal 1998, the Republican congressional majorities elected in 1994 effectively froze non-defense discretionary spending in real dollars. Following a deluge of stock-market-bubble-generated revenues, however, real non-defense discretionary spending soared by nearly a third over the next five years (1999-2003). In 2004 and 2005, the pace of increases in non-defense discretionary spending, excluding costs for homeland security, has abated. But it is against the soaring levels that occurred from 1999 through 2003 that the 2006 restraint must be judged.

In the third paragraph, The Post reported that “Medicaid funding would be reduced significantly.” Now, it is true that funding for Medicaid and the State Children’s Health Insurance Program would cumulatively be reduced by $44 billion over 10 years from the current baseline projection. But federal spending on Medicaid alone, which has increased from $41 billion in 1990 to $118 billion in 2000 to $188 billion in 2005, will continue to rise significantly — not “be reduced significantly,” as The Post reported. In fact, by 2010, federal spending for Medicaid is projected to total $261 billion.

The disingenuous reportorial screeching by The Post doesn’t help. Nor does the Bush administration’s refusal to include cost projections for military operations in Iraq and Afghanistan. The administration also declines to provide deficit forecasts beyond a five-year window; hesitates to offer a detailed plan for Social Security reform in part because of its budget implications; and won’t propose a long-term fix for the Alternative Minimum Tax, probably because it would cost more than $500 billion over 10 years.

Congressional Budget Office Director Douglas Holtz-Eakin is right when he repeatedly warns anyone who will listen, including the Senate Budget Committee on Feb. 1, that “current fiscal policy [is] unsustainable.” For all of the understandable complaints about the deficit coming from both sides of the aisle, it will be extremely distressing if Mr. Bush’s spending restraint is not given the fair hearing it deserves. While it may not be the sole solution to America’s fiscal imbalance, it is an indispensable part.


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