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Federal Budget And Taxes

Comments on the State of the Union address

Tuesday 31 January 2006

Stephen Slivinski, director of budget studies:

"President Bush recognizes that keeping government spending under control is a vital element in any plan to help the economy grow. A government that spends an increasingly larger share of GDP each year hurts the economy. Unfortunately, the president and the Republican Congress have passed budgets that grew faster than the economy, causing government spending to go from a 20-year low of 18% of GDP in 2001 to over 20% of GDP today.

"Mr. Bush proposed cuts in spending of around $14 billion. In a government that spends $2.7 trillion, a spending cut of this sort amounts to only 0.5% of the entire budget. But it’s also not entirely clear that these are going to be real cuts instead of just declines in the rate of spending growth. The president congratulated Congress for passing bills last year that included so-called cuts to non-security discretionary spending. Yet the newly released CBO numbers show that sort of spending grew by at least 4%. In the real world, that isn’t a cut."

Additional works:

• "The Grand Old Spending Party: How Republicans Became Big Spenders," Cato Policy Analysis no. 543, May 3, 2005
• "Fundamental Reforms Needed," Press-Enterprise, November 19, 2005

Chris Edwards, Director of Tax Policy Studies:

"The president’s call for just $14 billion in spending cuts reveals a complete lack of seriousness by the administration in dealing with the massive flood of red ink that will burden young Americans and spur calls for tax hikes that threaten to obliterate the modest tax cuts of recent years. When the government faces a $400 billion deficit during an economic boom, the president has a duty to propose $400 billion in spending cuts -- not cuts worth just 3.5% of that. Bush's proposed cuts for 2007 are even smaller that his proposed cuts last year, and represent only a tiny fraction of the costs imposed by his new prescription drug benefit, which will soon run more than $100 billion per year."

Additional works:

• Downsizing the Federal Government, by Chris Edwards, November 2005
• List of proposed Federal budget cuts, from Downsizing the Federal Government
• "Potomac Fever," Nationalreview.com, December 12, 2005