Bush's Budget for 2005 Seeks to Rein In Domestic Costs

NY Times ^ | January.4,2004 | ROBERT PEAR

[Reagan Man]

WASHINGTON, Jan. 3 — Facing a record budget deficit, Bush administration officials say they have drafted an election-year budget that will rein in the growth of domestic spending without alienating politically influential constituencies.

They said the president's proposed budget for the 2005 fiscal year, which begins Oct. 1, would control the rising cost of housing vouchers for the poor, require some veterans to pay more for health care, slow the growth in spending on biomedical research and merge or eliminate some job training and employment programs. The moves are intended to trim the programs without damaging any essential services, the administration said.

Even with the improving economic outlook, administration officials said, the federal budget deficit in the current fiscal year is likely to exceed last year's deficit of $374 billion, the largest on record.

The Congressional Budget Office and the White House budget office have projected a deficit of more than $450 billion this year.

But Joshua B. Bolten, director of the White House Office of Management and Budget, has said the president's policies will cut the deficit in half within five years, through a combination of economic growth and fiscal restraint.

Mr. Bush's budget request, to be sent to Congress by Feb. 2, includes several tax cut proposals, including new incentives for individual saving and tax credits to help uninsured people buy health insurance. The Democratic candidates for president have accused Mr. Bush of doing little to halt the recent rapid increase in the number of uninsured.

Administration officials said the president's budget would call for an overall increase of about 3 percent in appropriations for so-called domestic discretionary spending, which excludes the Department of Homeland Security, the Defense Department and insurance benefits like Medicare and Medicaid.

As he completes work on his budget, Mr. Bush faces criticism from conservatives, who say he has presided over a big increase in federal spending, and liberals, who say his tax cuts have converted a large budget surplus to a deficit.

Total federal revenues have declined for three consecutive years, apparently the first time that has happened since the early 1920's. But in those years, from 2000 to 2003, total federal spending has increased slightly more than 20 percent, to $2.16 trillion last year.

Brian M. Riedl, an economist at the conservative Heritage Foundation, said: "President Bush is not focusing on his fiscal conservative base right now. He's trying to position himself in between conservatives in Congress and the Democratic Party. It may be good politics, but it's bad policy, a lost opportunity to get runaway government spending under control."

White House officials deny that they have acquiesced in a domestic spending spree. They insist, as do some liberal advocacy groups, that appropriations for domestic programs are not exploding.

Such spending, they say, will increase 3 percent in 2004, after increases of 5 percent in 2003, 6 percent in 2002 and 15 percent in 2001. Moreover, they say, increased corporate profits should lead to an increase in corporate tax payments, lifting revenues in the coming years.

Richard Kogan, a budget analyst at the Center on Budget and Policy Priorities, a liberal-leaning research and advocacy group, said the increase in military and domestic security spending in the last two years dwarfed the increase in domestic discretionary programs, which did not quite keep pace with inflation.

"The increases for defense, international affairs and homeland security have been much greater — and thus have played a much larger role in the return to deficits — than the increases for domestic appropriations," Mr. Kogan said.

Housing officials said the administration was alarmed at increases in the cost of vouchers, which provide rental assistance to low-income families, and would take steps to prevent local housing agencies from issuing more vouchers than Congress had authorized. Congress has tentatively decided to provide $14.2 billion for renewal of vouchers this year, an increase of about 15 percent.

Federal officials said they would also require families seeking housing aid to help the government obtain more accurate information on their earnings. As a condition of receiving aid, families would have to consent to the disclosure of income data reported to a national directory of newly hired employees. The directory was created under a 1996 law to help enforce child-support obligations.

Administration officials said the president's budget would also slow the growth of spending at the National Institutes of Health, which doubled in the last five years, reaching $27.1 billion in 2003. Congress has tentatively agreed to provide $28 billion this year, slightly more than Mr. Bush requested, and administration officials said they would seek an increase of 3 percent or less for 2005.

Budget officials defended the proposal, saying they wanted to be sure the agency was properly managing a huge infusion of federal money.

Mr. Bush proposed last year to double co-payments on prescription drugs for many veterans, primarily those with higher incomes and no service-connected disabilities. The White House reaffirmed its support for that proposal in November.

In the last week, the Pentagon has been considering a new proposal to increase pharmacy co-payments for retirees with at least 20 years of military service. Under the proposal, the charge for a generic drug would rise to $10, from $3, while the charge for a brand-name medicine would rise to $20, from $9.

The Military Officers Association of America criticized this as "a grossly insensitive and wrong-headed proposal." In e-mail messages to the White House, members of the association asked Mr. Bush, "Why do your budget officials persist in trying to cut military benefits?"

Col. Steven P. Strobridge, director of government relations at the association, said he understood that the Pentagon was now inclined to study the issue for a year and renew the proposal, as part of a systematic effort to "reduce military health care costs."

Administration officials said they expected Mr. Bush to seek increases of $1 billion, or 10 percent, for the education of children with disabilities and $1 billion, or 8 percent, in Title I grants for schools with high concentrations of students from low-income families.

Budget officials said they were concerned that they did not have enough money for Pell grants to keep pace with a recent surge in low-income students seeking help with college costs. They said Mr. Bush would address that problem in some way, without seeking an increase in the maximum grant, now $4,050.

The budget also seeks money to train more nurses, to encourage sexual abstinence among teenagers and to recruit "volunteers in homeland security," who can respond to emergencies, including terrorist attacks.

[Kay Soze]

Mr. Bush faces criticism from conservatives, who say he has presided over a big increase in federal spending, and liberals, who say his tax cuts have converted a large budget surplus to a deficit.

I am one such conservative/unappeaser! Those unhappy with the status quo move the world while others run. We moved the party back to the right.

Brian M. Riedl, an economist at the conservative Heritage Foundation, said: "President Bush is not focusing on his fiscal conservative base right now. He's trying to position himself in between conservatives in Congress and the Democratic Party. It may be good politics, but it's bad policy, a lost opportunity to get runaway government spending under control."

White House officials deny that they have acquiesced in a domestic spending spree.

This is great news for conservatives.

[Reagan Man]

>>>Cutting spending is a political impossibility.

Spoken like a true "Pragmatist".

>>>Reagan could not do it.

Reagan did cut federal spending. He lowered discreationary spending in his first three years in office. If Reagan had a GOP majority control like PresBush has, he would have cut government a lot more.

>>>Bush cannot do it.

Bush doesn't want to do it. Yet. I've been holding out for some serious downsizing in a second Bush-Cheney term and this may be an early indicator of things to come.

I do not recommend draconian spending cuts and support political incrementaism. Incentives given for good management efforts are fine with me, but that only scrapes the surface. To kick start some serious fiscal responsibility in the federal government, I would support a spending freeze for one year.

Politics is a slow process, but at the rate that Social Security and Medicare are growing, before we know it these two entitlement programs will consume half of the federal budget. Right now SS and Medicare eat up 1/3rd of the federal budget and "Human Resources" --- aka. SOCIAL SPENDING --- consumes over 66% of the federal budgetary expenditures. There needs to be real reform of these two out of control federal programs, before its too late.

[Reagan Man]

>>>When is government going to get productive and efficient and start laying off workers?

I think PresBush and the GOP Congress will have a rare opportunity in the next several years to start to make the federal governemnt more efficient and effective in its operations. There must be a serious effort made in a second Bush-Cheney term to reduce the high levels of waste, fraud and abuse that currently exist in the federal bureaucracy. Before its too late.

[xrp]

I'd like to see steady REDUCTIONS in the budget of 3 percent by President Compassionate Conservative.

[mabelkitty]

Duh. We called this last year.
Spend on National Security first, foremost, and much.
Cite the deficit as a reason to cut the fat.
If anybody was hanging around and waiting for the remaining seven appropriations to get their fat for their district, they can wait until hell freezes over.

This is an election year - nobody will get fat - especially any Democrats helping his opposition.

Anybody who opposes this will be told, "What is the alternative? Do you want your taxes raised?" Dems will have to run on raising taxes.

And people call W. an idiot. Wish I was an idiot, too.

[mabelkitty]

And? You oppose this? If so, why?

[jagrmeister]

http://www.rushlimbaugh.com/home/daily/site_090903/content/institute.guest.html

The facts disagrees with you. Reagan raised discretionary spending in his first 3 years by 6.8%. Don't believe me, look the chart over which breaks it down by department.

I agree that Medicare and SS are the big ones that need to be dealt with. Ideally we can return the obligation to the individual through personal retirement accounts.

[mabelkitty]

They have to - in the next two years, 50% of all Federal employees will be eligible for retirement.

He has the opportunity to allow those positions to go unfilled. An opportunity we won't see again.

[nopardons]

None, hopefully. A " surplus " only means that the populace is being OVER TAXED .

[xrp]

We moved the party back to the right.

You need to get it back to the center, first.

[Our man in washington]

Excellent point, Biblebelter! I work for the Federal government, and my agency could reduce personnel by 50 percent if rules on firing Federal employees were changed and managers were given incentives to cut costs.

We have employees who brag about how little work they do. Something has to be changed.

(And if downsizing comes and I'm one of the ones laid off, so be it. Being on the Federal payroll is a privilege and a responsibility, not a right.)

[Tennessean4Bush]

How is increasing expenditures reducing government?

It is reducing the relative size as opposed to the absolute size. If government increases at 3% and GDP increases at 5%, then the government gets small relative to GDP.

Of course, I would love to see someone reduce the actual size of government, but I doubt the political will to do it exists in anyone with the actual ability to do it.

[Kay Soze]

Funny!

But you know as well as I the power of this forum and I intend to continue to use it to push the party back to center and then right.

Even at the ire of many so called conserrvatives that are here.

[MegaSilver]

Send the corrupters to a juvenile disciplinary center, and keep them there until they are 'trained'!

I liked your ideas until this last sentence here. The problem is that such correcting centers don't seem to be very effective in correcting youth. For delinquent (sp?) young people, I personally would prescribe either:

1. Catholic school (if there's nuns)
2. Boot camp

[Reagan Man]

>>>The facts disagrees with you. Reagan raised discretionary spending in his first 3 years by 6.8%. Don't believe me, look the chart over which breaks it down by department.

You better read the chart on Rush`s website again. The facts back me up 100%. You're wrong.

There were actually two different CATO Institute articles and two different sets of charts on this subject matter. One was released in April 2003 and was called On Spending, Bush Is No Reagan. The other article and chart was posted on CATO in August 2003, using the same title, On Spending, Bush Is No Reagan. The August 2003 article was an updated version based on a recently released mid-session review of the 2004 budget by the Bush administration.

Both the early chart and the revamped version clearly indicate that PresReagan lowered discreationary spending his first three years in office.

I'll post both charts for your benefit.

Here's a key part from the August 2003 CATO article that says it all.

"... Reagan cut real nondefense discretionary outlays by 13.5 percent compared to a 20.8 percent increase under Bush."

[Reagan Man]

In addition, SS and Medicare aren't part of the discretionary budget spending. They're part of the mandatory entitlement expenditures.

[jagrmeister]

I'm aware of the difference. I never claimed Medicare and Social Security were discretionary. Read the chart- Reagan didn't cut spending in his first three years.

[jagrmeister]

You've changed your argument. Here is what you said initially: "He lowered discretionary spending in his first three years in office." That is not supported by either chart. But it's clear Reagan had a better record on addressing non-defense discretionary spending than Bush.

[Jorge]

The facts disagrees with you. Reagan raised discretionary spending in his first 3 years by 6.8%.

You're right. Reagan had to agree to spending increases in order to get the Dems to pass his programs, including tax cuts.

And while the tax cuts soon resulted in increased revenue to the Treasury, the increased spending still caused a deficit.
The lying Dems have claimed ever since that the Reagan tax cuts caused the deficits.

[pageonetoo]

Send the corrupters to a juvenile disciplinary center, and keep them there until they are 'trained'! -page

The problem is that such correcting centers don't seem to be very effective in correcting youth. For delinquent (sp?) young people, I personally would prescribe either:

1. Catholic school (if there's nuns)

2. Boot camp -Mega

We are on the same page, just reading different words... The main thing is to separate the trouble-makers, and begin ,b.teaching again!

I don't think they even teach Latin, now, do they? Much less, Chaucer, Will'm Shakespeare, or the Bible. Nor, do they allow our children to read good old 'Uncle Remus', regardless of its un-PC structures...

Whatever has happened to the public schools (rhetorical question)? They certainly aren't properly educating, nor preparing...