Commentary

Bush’s Bad Recipe for Savings

By Stephen Slivinski
This article appeared in Star Telegram online on February 20, 2006.

Conservative voters are looking for reassurances that Republicans are still the party of small government. They won’t find much solace in the president’s new budget. With each passing year, George W. Bush’s budgets get less and less ambitious.

Bush proposed a 2 percent increase in overall spending for fiscal 2007. That’s certainly better than the 10 percent growth inflicted on taxpayers in the budget for 2006 — assuming that Congress rubber-stamps the White House’s new request for Iraq and Hurricane Katrina relief (which it probably will) and doesn’t find offsetting budget cuts elsewhere (which it probably won’t).

But the 2 percent growth does not include money for operations in Iraq for the entire year. The White House assumes a request for $50 billion at a later date, but based on past experience, this estimate is low. The supplemental request for the current fiscal year has already ballooned to $120 billion.

Then there’s the matter of whether Bush can meet his goal of cutting the budget deficit in half by the time he leaves office. He’s proposed to cut $14 billion in non-security spending, but these cuts are overwhelmed by growth in other non-security programs. According to the fine print, spending on these sorts of programs actually will go up by $2 billion, not down.

Yet by White House officials’ own estimation, meeting their deficit targets will require actual cuts to non-security spending by a total of $31 billion by the time Bush leaves office. Bush’s current proposals are weak sauce and won’t get the job done.

Bush’s budget last year included a list of 154 programs slated for cuts or termination. This year, the list of 141 programs is composed of the programs that Congress left untouched last year and a handful of old proposals. The list includes only 21 programs that haven’t been on Bush’s target list before.

In a federal budget with close to 1,000 individual programs, Bush’s list looks absolutely dwarfish. And the savings are smaller than last year’s proposals, too. This year’s list only gets to $14 billion in savings, whereas last year’s list yielded $17 billion.

The White House may brag about these lists, but they really aren’t that aggressive. The Republican Revolution budget of 1995 listed close to 300 programs for termination or cuts, with savings amounting to over $40 billion. And that was at a time when the GOP controlled only one end of Pennsylvania Avenue.

Bush fails the comparison test to Ronald Reagan, too. The Gipper’s first budget proposed a list of 283 program cuts and terminations for a savings of $49 billion.

The president’s Medicare proposals are even less ambitious. They are mainly technical changes to contain the expense of the program over the short term. But the proposals, far from “squeezing” money out of the program (as widely reported), merely bring the annual growth rate of the program to 7.7 percent from 8.1 percent — hardly the root-canal approach.

In fact, Bush’s budget proposals do nothing to help fix the long-term structural problems with Medicare. Instead of actually coming up with solutions, he proposes another commission that will result in another report that will go into another file cabinet and be ignored.

There isn’t a lack of ideas in Washington on how to reform entitlements or return the federal government to its proper boundaries. There is a lack of political courage. Republicans in Congress did nothing to advance Bush’s plan to reform Social Security, and they should have. They rolled over and accepted Bush’s budget-busting Medicare drug benefit when they shouldn’t have.

Republicans need bold plans to downsize the federal government, not some wishy-washy tinkering around the edges. Otherwise, it’s not likely that fiscal conservatives can muster much enthusiasm for continued GOP control of Congress.

Stephen Slivinski is director of budget studies at the Cato Institute.