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Tuesday, February 07, 2006
$256 billion and counting
Ah, February, when a President's thoughts turn to crafting a budget. A good place to start reviewing the budget is the Citizens Guide...which Bush stopped providing in 2002. For good reason, too. Who can forget such laughably inaccurate passages like this:
The 2002 Budget forecasts surpluses for decades to come if we maintain a policy of fiscal discipline.
Should we worry about the possibility of a return to budget deficits?
Deficits increase the Federal debt and, with it, the Government's obligation to pay interest. The more it must pay in interest, the less it has available to spend on education, defense, law enforcement, and other important services, or the more it must collect in taxes. As recently as 1997, the Government spent more than 15 percent of its budget to pay interest, in contrast to less than 10 percent projected for 2002. The President’s budget will reduce these interest payments dramatically in the next 10 years.
In the end, the surplus is a decision about our future. We can provide a solid foundation for future generations, just as parents try to do within a family. For a Nation, this means a strong economy and low interest rates and debt. Alternatively, we can generate large deficits and debt for those who come after us.
I think we all know how that turned out.
Bush's 2002 Guide contains projections through 2006. The latest budget proposals are for the 2007 fiscal year, which begins October 1, 2006. Let's take a quick look at how Bush's projections then match estimates for 2006.
2004 projected revenues: $2.339 trillion
2004 actual revenues: $1.880 trillion
Difference: $459 billion less revenue than predicted (20%)
2006 projected revenues: $2.529 trillion
2006 estimated revenues (PDF): $2.178 trillion
Difference: $351 billion less revenue than predicted (14%)
2004 projected spending: $2.077 trillion
2004 actual spending: $2.292 trillion
Difference: $215 billion more spending than predicted (10%)
2006 projected spending: $2.224 trillion
2006 estimated spending: $2.568 trillion
Difference: $344 billion more spending than predicted (15%)
Here's a fun fact. In 2002, Bush's budget promised to "dramatically" reduce interest payments over a 10 year period. How's that promise holding up?
2006 projected cost of interest on the federal debt: $127 billion
2006 estimated cost of interest on the federal debt: $211 billion
And the latest budget projects that the cost of interest on the federal deficit will balloon from $160 billion in 2004 to $314 billion by 2010.
Here are not so fun facts. Bush's budget proposal would cut education spending by $10 billion, cut Medicaid and children's health insurance by $44 billion, and cut the pension benefit guaranty funding by $26 billion. That's $80 billion taken from children and workers over the next 10 years. How much will the Paris Hilton Tax Cut cost?
$256 billion
Plus $100 billion for the dividend tax cut, $60 billion for the capital gains tax cut, and $500 billion for income tax cuts. We can afford a country that takes care of its young, ill, and enfeebled. But we are choosing to fund tax breaks for multimillionaires and their heirs.
If sometime in the next 10 years you wonder how you're going to pay for college, how you're going to get your sick kid his medicine, or how you're going to afford retirement after your employer defaults on its pension obligation, take comfort in this: Paris Hilton can afford to wallpaper the rooms of all her daddy's hotels with $20 bills thanks to Bush's tax cut.
Postscript: I've done more reading on the PBGC cuts. The administration is seeking to balance cuts in funding the PBGC by increasing premiums paid by employers. At best, then, the budget would leave the PBGC's current $22 billion deficit untouched. If the budget cuts are not fully offset by the increased premiums, the deficit will only grow larger.
1 Comments:
And never forget who is most responsible for the federal debt problem: St. Ronald Reagan who quadrupled the debt during his time in office. The interest we have paid on old Ronnie's debt is staggering. But W is so incredibly bad that I fear younger readers may forget what an awful president Reagan was. Second. Worst. President. Ever.
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