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Cato Daily Dispatch for January 26, 2004

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Budget Deficits Heading for $2 Trillion-plus
Kay: No WMDs in Iraq
Building an "Ownership Society"

Budget Deficits Heading for $2 Trillion-plus

"Federal deficits will total nearly $2.4 trillion over the next decade, the Congressional Budget Office projected Monday, a worsening of nearly $1 trillion since its last forecast in last August," The Associated Press reports.

"In its annual wintertime economic update, Congress' nonpartisan fiscal analyst also projected that the red ink would hit a record $477 billion this year."

Cato fiscal policy analyst Veronique de Rugy said today, "We knew all along that in five years, the 'Baby Boomer' generation will start to retire. The Bush administration should have been pruning the budget for the massive increases in entitlement spending that would result; but instead, it started spending more on all areas of government. Democrats, however, have little room to criticize the president, since they have not done their part to limit spending in Congress."

"Looking ahead, Republicans need to rediscover the reforming spirit that they brought to Washington after the landmark 1994 congressional elections," De Rugy writes in a new study, "The Republican Spending Explosion". "Fiscally conservative Democrats should challenge big-spending Republicans and work to cut unneeded programs from both the defense and nondefense parts of the budget."

Kay: No WMDs in Iraq

"Former chief U.S. weapons hunter David Kay told Reuters on Friday that he has concluded Iraq did not have stockpiles of biological and chemical weapons," the news agency reports. "He told National Public Radio over the weekend that the U.S. intelligence community owes Bush an apology."

"Asked about Kay's conclusions, White House Press Secretary Scott McClellan said the Iraq Survey Group that Kay headed until his resignation last week was still working to discover the truth about alleged Iraqi weapons of mass destruction, the existence of which was Bush's main justification for going to war."

In "Bush Must Account for WMD Allegations", Cato Senior Fellow Doug Bandow calls for President Bush to be upfront about his reasons for military action in Iraq. "The point is not that the administration is necessarily guilty of misbehavior, but that it should be forced to defend its decision-making process.... If the weapons of mass destruction didn't exist, or were ineffective, Washington's professed case for war collapses.

"Conservatives' lack of interest in the WMD question takes an even more ominous turn when combined with general support for presidential war-making. Republicans -- think President Eisenhower, for instance -- once took seriously the requirement that Congress declare war. These days, however, Republican presidents and legislators, backed by conservative intellectuals, routinely argue that the chief executive can unilaterally take America into war. This is not the government created by the Founders. This is not the government that any believer in liberty should favor."

Building an "Ownership Society"

"'The ownership society' is the kind of lofty phrase that politicians use to make modest or mundane proposals sound like epochal change. But in this instance, the rhetoric actually fails to convey the sweep of the changes that [President] Bush has in mind," National Journal's Julie Kosterlitz writes.

"Taken together, the Bush proposals have the potential to fundamentally alter America's public and private health and retirement systems, reshape the tax code -- and, in the process, rewrite the social contract that defined much of the nation's past century."

The Cato Institute has added an Ownership Society section to its Web site -- that explores the importance of giving Americans responsibility for their own welfare, health, retirement and education. The site includes an essay by Tom Palmer, a senior fellow at Cato, on the philosophical history of the concept, as well as background information and policy briefs.

Briefly put, an ownership society is a society that values responsibility, liberty, and property. It empowers individuals by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In an ownership society, patients control their own health care, parents control their own children's education, and workers control their retirement savings.

Christopher Kilmer, editor, ckilmer@cato.org