- The Washington Times - Wednesday, February 8, 2006

There’s much to like in President Bush’s 2007 budget proposals that would slow the rise in overall federal spending to little more than 2 percent.

If Congress reduces spending anywhere nearly so low, it would be astounding, especially in a hotly contested election year when lawmakers don’t like voting for budget cuts.

Total federal spending has been increasing between 4 percent and 8 percent a year under Mr. Bush’s presidency. Much of it in response to huge catastrophic events that have cost a lot — the terrorist attacks, the wars in Iraq and Afghanistan, homeland security, sharply higher defense spending for the war on terrorism, and then Hurricane Katrina.

But much of it also was due to greedy lawmakers who stuffed the budget with tens of billions of dollars in earmarked porkbarrel spending for their folks back home and their failure to reform, eliminate or prune ineffective, wasteful, redundant or outdated programs.

Mr. Bush, too, must assume some responsibility because he refused to veto pork-filled spending bills. (The recent highway authorization bill included 6,371 earmarks costing $25 billion.)

The budget’s growth during Mr. Bush’s presidency has been breathtaking. It was close to $2 trillion when he came into office and has shot up like an Atlas rocket ever since.

In fiscal 2005, spending totaled $2.47 trillion and counting. By fiscal 2006 it surged to an estimated $2.71 trillion, triggering anger from Mr. Bush’s conservative base that threatened to divide his party. White House political adviser Karl Rove warned privately Mr. Bush had to be seen dealing with rising spending or risk erosion in the GOP’s grass roots. Mr. Bush is doing just that. His fiscal 2007 budget, beginning Oct. 1, would raise overall spending to $2.77 trillion, a 2.3 percent increase.

If the Republican Congress can hold spending there, it would be the smallest one-year increase of his presidency and represent a sharp brake on future nondefense discretionary expenditures.

Mr. Bush’s budget’s biggest discretionary spending increases (appropriations made each year) are for defense and homeland security to fight the war on terror and spare us another attack.

But he offsets these increases with cuts elsewhere in the government. Nine in 15 Cabinet level agencies would see net spending reductions, including Transportation, Justice and Agriculture. He would eliminate or scale back 141 programs for a savings of $14.5 billion. Even a sacred cow like the National Institutes of Health would see its budget virtually frozen at this year’s level after five years of increases.

Critically important to the economy’s future health and vitality, Mr. Bush’s budget would make permanent his first-term tax cuts. Democratic critics have denounced the tax cuts, saying they are responsible for the higher budget deficits. In fact, those tax cuts led to higher economic growth 4.7 million new jobs that yielded $100 billion more tax revenue, reducing the deficit one-fourth in fiscal 2005.

These and other spending reductions drew cheers this week from his sharpest conservative critics.

“Overall, he wants to reduce nonsecurity discretionary spending by cutting or eliminating wasteful programs and we give him a very generous pat on the back for that,”said Michael Franc, Heritage Foundation vice president for government affairs.

Tom Schatz, president of Citizens Against Government Waste, called it “a good start. We’re obviously encouraged that the spending increase is lower than in previous years.”

But Mr. Franc, Mr. Schatz and other conservatives cited the budget’s glaring failure to adequately control Medicare and Medicaid entitlements that will explode in the next few years as millions of Baby Boomers start signing up for benefits. Medicare alone will grow by $49 billion in 2007. “Given the Baby Boomer retirement challenges we face, his relatively modest reduction in Medicare is woefully insufficient,” Mr. Franc told me.

Mr. Bush’s budget proposes trimming Medicare by $35.9 billion over five years (largely by reduced payments to hospitals), and by $105 billion in 10 years. A brave effort, though it has zero chance of passing in an election year.

Meantime, you will hear a lot of fearmongering about the deficits when the budget debate begins in earnest. But there is one number you won’t hear much: the nation’s gross domestic product (GDP), which measures the size of our economy.

GDP is about $12.4 trillion now. But Mr. Bush’s budget forecasts it will jump to $13.76 trillion in the coming fiscal year — a huge increase that says our economy remains on a sharp upward growth trajectory if we make the tax cuts permanent.

And that means federal revenues will be much higher than thus far forecast. Without deeper spending cuts, that will be the government’s most effective deficit-cutting weapon of all.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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