After Bush Leaves Office, His Budget's Costs Balloon
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From The Washington Post (not necessarily supporters of George W. Bush). Headline is linked
After Bush Leaves Office, His Budget's Costs Balloon
By Jonathan Weisman and Peter Baker
Washington Post Staff Writers
Monday, February 14, 2005; Page A01
For President Bush, the budget sent to Congress last week outlines a painful path to meeting his promise to bring down the federal budget deficit by the time he leaves office in 2009. But for the senators and governors already jockeying to succeed him, the numbers released in recent days add up to a budgetary landmine that could blow up just as the next president moves into the Oval Office.
Congress and the White House have become adept at passing legislation with hidden long-term price tags, but those huge costs began coming into view in Bush's latest spending plan. Even if Bush succeeds in slashing the deficit in half in four years, as he has pledged, his major policy prescriptions would leave his successor with massive financial commitments that begin rising dramatically the year he relinquishes the White House, according to an analysis of new budget figures.
Bush's extensive tax cuts, the new Medicare prescription drug benefit and, if it passes, his plan to redesign Social Security all balloon in cost several years from now. His plan to partially privatize Social Security, for instance, would cost a total of $79.5 billion in the last two budgets that Bush will propose as president and an additional $675 billion in the five years that follow. New Medicare figures likewise show the cost almost twice as high as originally estimated, largely because it mushrooms long after the Bush presidency.
"It's almost like you've got a budget, and you've got a shadow budget coming in behind that's a whole lot more expensive," said Philip G. Joyce, professor of public policy at George Washington University.
By the time the next president comes along, some analysts said, not only will there be little if any flexibility for any new initiatives, but the entire four-year term could be spent figuring out how to accommodate the long-range cost of Bush's policies.
"That president would have to face a very fundamental decision as to whether he would want to do what was right and be a one-term president or continue to play the same game and push it onto his successor," said Leon E. Panetta, who served as budget director and later White House chief of staff under President Bill Clinton. "That's really the choice that's going to face the next president."
The knowledge of what's ahead is hardly lost on some of those eyeing Bush's job. Sen. John McCain (R-Ariz.) has been among those raising concerns about the long-term costs of current financial policies.
"Hopefully some very difficult decisions will be addressed between now and the time we have a new White House resident so that occupant isn't faced with some very expensive chickens coming home to roost," said John Weaver, a McCain adviser. "There are some things that we can do, but unfortunately in the political world kicking down the road is often seen as leadership."
Bush advisers argue that he is tackling problems long ducked by other presidents and that his solutions will pay off in the long run. Joshua B. Bolten, director of the White House Office of Management and Budget, predicted last week that making the Bush tax cuts permanent could have positive economic consequences that would mitigate their costs. And he expressed hope that the Medicare prescription drug law may still result in health care savings not captured in the current cost estimates.
As for Social Security, Bush aides said that the president's plan would wipe out a long-term structural deficit facing the nation in coming decades and that the transition costs in the next decade or so will ultimately be overshadowed by the benefits. "People in the future are going to benefit from that decision," said budget office spokesman Chad Kolton.
If Congress were to pass Bush's Social Security plan and permanently extend his tax cuts, the budget deficit would bottom out at $251 billion in 2008, then climb steadily to $335 billion by 2015, according to an analysis by The Washington Post and the House Budget Committee's Democratic staff. Those figures assume, however, that Bush will secure all of his proposed spending cuts, that he will need no more emergency war spending and that there will be no changes to the alternative minimum tax, which Bush and other politicians want to rewrite to keep it from affecting more middle-class families in coming years. The AMT originally was designed to make sure wealthy people couldn't avoid paying some taxes.
With a fix to the AMT, deficits in a decade would likely reach $650 billion to $700 billion, said Sen. Lindsey O. Graham (R-S.C.). "The days of being everything to everybody are quickly coming to a close," he said, adding that a permanent extension of the Bush tax cuts would make it politically impossible to borrow the full cost of a Social Security fix. "We have to look at the deficit in a holistic way."
The White House's own 10-year costs of the Medicare drug benefit, the president's tax cuts and the plan for personal Social Security accounts are beginning to jar Republicans into rethinking the budget's trajectory, Graham said.
June O'Neill, a Republican former director of the Congressional Budget Office, agreed that the current trajectory is no longer sustainable. "I don't think that people should waste too much time on probing the details of current policy, which just can't last," she said.
... more at linked article
Some readers may ask why I, normally a supporter (and still, even as I read this article and comment about it) of George W. Bush would post this article.
It's in the interest in a little something I like to call "fairness".
Seriously, there are issues with spending and revenue with President George W. Bush's budgets. (Quick, someone break out the smelling salts for Clueless Old Liberal Gene and his friends on the other side of the aisle). I won't pretend the problems aren't there. They are. Spending must be controlled. Revenue must be maximized.
But... I prefer to see things handled in a way that is fair to all tax payers. Simply saying that we must soak the rich isn't enough. President George H.W. Bush tried that. Remember the luxury tax? It killed jobs for boat builders, and builders of other "luxury" items. Instead of spending money to buy new fancy toys, rich folks bought used. They remodelled and refurbished. They held on waiting for cuts in capital gains that they were sure would come along. Money policy got tight, and that expected boost in revenue never materialized.
You see, it seems that every time someone starts screaming about soaking the rich, taxing them and getting more revenue, we see new charts and new numbers that show just the opposite has happened.
The fact is, we must cut programs. Duplicate efforts must be consolidated and cut. Unnecessary items must be purged from the budget. The federal government must become minimalistic and be more frugal with it's (our) money.
Meanwhile, we can not and must not ignore realities of finance that have proven true time and again. Cutting taxes has resulted in increased revenues for the federal (and other) government. People become less tight with their money. They spend it buying goods and services, which feeds back into the economy in the form of new jobs, which becomes more revenue from workers that fill those jobs and provide those goods and services.
Lets get it right. Lets cut spending, and lets look at intelligent places to get revenue. But lets also learn lessons from the effects we have seen from the Reagan cuts, and the George W. Bush cuts.
After Bush Leaves Office, His Budget's Costs Balloon
By Jonathan Weisman and Peter Baker
Washington Post Staff Writers
Monday, February 14, 2005; Page A01
For President Bush, the budget sent to Congress last week outlines a painful path to meeting his promise to bring down the federal budget deficit by the time he leaves office in 2009. But for the senators and governors already jockeying to succeed him, the numbers released in recent days add up to a budgetary landmine that could blow up just as the next president moves into the Oval Office.
Congress and the White House have become adept at passing legislation with hidden long-term price tags, but those huge costs began coming into view in Bush's latest spending plan. Even if Bush succeeds in slashing the deficit in half in four years, as he has pledged, his major policy prescriptions would leave his successor with massive financial commitments that begin rising dramatically the year he relinquishes the White House, according to an analysis of new budget figures.
Bush's extensive tax cuts, the new Medicare prescription drug benefit and, if it passes, his plan to redesign Social Security all balloon in cost several years from now. His plan to partially privatize Social Security, for instance, would cost a total of $79.5 billion in the last two budgets that Bush will propose as president and an additional $675 billion in the five years that follow. New Medicare figures likewise show the cost almost twice as high as originally estimated, largely because it mushrooms long after the Bush presidency.
"It's almost like you've got a budget, and you've got a shadow budget coming in behind that's a whole lot more expensive," said Philip G. Joyce, professor of public policy at George Washington University.
By the time the next president comes along, some analysts said, not only will there be little if any flexibility for any new initiatives, but the entire four-year term could be spent figuring out how to accommodate the long-range cost of Bush's policies.
"That president would have to face a very fundamental decision as to whether he would want to do what was right and be a one-term president or continue to play the same game and push it onto his successor," said Leon E. Panetta, who served as budget director and later White House chief of staff under President Bill Clinton. "That's really the choice that's going to face the next president."
The knowledge of what's ahead is hardly lost on some of those eyeing Bush's job. Sen. John McCain (R-Ariz.) has been among those raising concerns about the long-term costs of current financial policies.
"Hopefully some very difficult decisions will be addressed between now and the time we have a new White House resident so that occupant isn't faced with some very expensive chickens coming home to roost," said John Weaver, a McCain adviser. "There are some things that we can do, but unfortunately in the political world kicking down the road is often seen as leadership."
Bush advisers argue that he is tackling problems long ducked by other presidents and that his solutions will pay off in the long run. Joshua B. Bolten, director of the White House Office of Management and Budget, predicted last week that making the Bush tax cuts permanent could have positive economic consequences that would mitigate their costs. And he expressed hope that the Medicare prescription drug law may still result in health care savings not captured in the current cost estimates.
As for Social Security, Bush aides said that the president's plan would wipe out a long-term structural deficit facing the nation in coming decades and that the transition costs in the next decade or so will ultimately be overshadowed by the benefits. "People in the future are going to benefit from that decision," said budget office spokesman Chad Kolton.
If Congress were to pass Bush's Social Security plan and permanently extend his tax cuts, the budget deficit would bottom out at $251 billion in 2008, then climb steadily to $335 billion by 2015, according to an analysis by The Washington Post and the House Budget Committee's Democratic staff. Those figures assume, however, that Bush will secure all of his proposed spending cuts, that he will need no more emergency war spending and that there will be no changes to the alternative minimum tax, which Bush and other politicians want to rewrite to keep it from affecting more middle-class families in coming years. The AMT originally was designed to make sure wealthy people couldn't avoid paying some taxes.
With a fix to the AMT, deficits in a decade would likely reach $650 billion to $700 billion, said Sen. Lindsey O. Graham (R-S.C.). "The days of being everything to everybody are quickly coming to a close," he said, adding that a permanent extension of the Bush tax cuts would make it politically impossible to borrow the full cost of a Social Security fix. "We have to look at the deficit in a holistic way."
The White House's own 10-year costs of the Medicare drug benefit, the president's tax cuts and the plan for personal Social Security accounts are beginning to jar Republicans into rethinking the budget's trajectory, Graham said.
June O'Neill, a Republican former director of the Congressional Budget Office, agreed that the current trajectory is no longer sustainable. "I don't think that people should waste too much time on probing the details of current policy, which just can't last," she said.
... more at linked article
Some readers may ask why I, normally a supporter (and still, even as I read this article and comment about it) of George W. Bush would post this article.
It's in the interest in a little something I like to call "fairness".
Seriously, there are issues with spending and revenue with President George W. Bush's budgets. (Quick, someone break out the smelling salts for Clueless Old Liberal Gene and his friends on the other side of the aisle). I won't pretend the problems aren't there. They are. Spending must be controlled. Revenue must be maximized.
But... I prefer to see things handled in a way that is fair to all tax payers. Simply saying that we must soak the rich isn't enough. President George H.W. Bush tried that. Remember the luxury tax? It killed jobs for boat builders, and builders of other "luxury" items. Instead of spending money to buy new fancy toys, rich folks bought used. They remodelled and refurbished. They held on waiting for cuts in capital gains that they were sure would come along. Money policy got tight, and that expected boost in revenue never materialized.
You see, it seems that every time someone starts screaming about soaking the rich, taxing them and getting more revenue, we see new charts and new numbers that show just the opposite has happened.
The fact is, we must cut programs. Duplicate efforts must be consolidated and cut. Unnecessary items must be purged from the budget. The federal government must become minimalistic and be more frugal with it's (our) money.
Meanwhile, we can not and must not ignore realities of finance that have proven true time and again. Cutting taxes has resulted in increased revenues for the federal (and other) government. People become less tight with their money. They spend it buying goods and services, which feeds back into the economy in the form of new jobs, which becomes more revenue from workers that fill those jobs and provide those goods and services.
Lets get it right. Lets cut spending, and lets look at intelligent places to get revenue. But lets also learn lessons from the effects we have seen from the Reagan cuts, and the George W. Bush cuts.