Commentary

Doing a Poor Job with Our Money

Thanks to continued spending growth, the Bush administration’s newly released budget projections reveal an anticipated budget deficit of $521 billion for the current fiscal year, up $146 billion since FY2003. The administration is already tripping over itself to blame the deficit on the war and a slow economy. At the same time, it is bragging about how fiscally responsible it is. As proof, it will point to 60 proposed program cuts. But if history is our guide, this administration is talk and no action. From the No Child Left Behind education bill to the Medicare prescription drug bill, this administration has repeatedly abandoned its proclaimed conservative principles. In doing so, the White House has made it clear that reelection — at any cost — is the goal.

In his State of the Union speech, Bush said: “In two weeks, I will send you a budget that funds the war, protects the homeland, and meets important domestic needs, while limiting the growth in discretionary spending to less than 4 percent. This will require that Congress focus on priorities, cut wasteful spending, and be wise with the people’s money.” He then touted new spending initiatives, such as doubled funding for abstinence programs and $300 million to help ex-inmates find work. The next day, at an Ohio town meeting, he promised $120 million for teacher training, $28 million for an advanced placement program, $250 million for job training, and increased funding for Pell grants.

Then, on Jan. 22, Bush applauded passage of the Omnibus spending bill, adding, “I will continue to work with Congress to focus on priorities, cut wasteful spending and be wise with the people’s money.” The omnibus was stuffed with 8,000 earmarked pork projects, twice the number the Democrats typically included when they held power. The omnibus was a prime opportunity for President Bush to use his veto pen. He didn’t.

These increases are poised to continue. In his latest budget message, President Bush says, “the Government must exercise fiscal responsibility by limiting spending growth.” The new numbers show a 3.5 percent increase in total outlays between FY2004 and FY2005, which means that total outlays have increased by 28.8 percent in the first four years of the Bush administration. Discretionary spending will have increased by 40.8 percent in four years, which includes a dazzling nondefense discretionary spending increase of 41.3 percent. Is that “fiscal responsibility”?

Among other things, the budget shows a 7 percent military spending increase (which will likely be followed by another supplemental in 2005); a 10 percent increase for homeland security; and 11 percent for the FBI. After a 47 percent increase since President Bush took office in January 2001 that is completely irresponsible. Defense spending is Big Government just like other federal spending. Massive defense spending damages the economy by reducing resources available to the private sector. The administration should not receive a blank check for defense. It should instead seek to cut the billions of dollars of known waste in the Pentagon’s budget.

Moreover, after increasing education spending by 70 percent, Bush has proposed an additional 3 percent increase. The National Endowment for the Arts, which has no legitimate reason to be funded by the federal government, will get a 15 percent increase. All of this comes on the heels of the administration’s recent admission that the cost of its already costly new prescription drug program will be $140 billion more than originally claimed. That of course is still an understatement of the true cost of this program which could cost taxpayers as much as $2 trillion in its second decade according to the Congressional Budget Office.

To be sure, both Congress and the administration deserve blame for the spending increases. For example, the president’s FY2004 budget requested $429 billion in nondefense spending. But the actual FY2004 spending will reach at least $475 billion. Nonetheless, when an $87 billion supplemental was added to pay for operations in Iraq neither Congress nor the president attempted to offset it with spending cuts.

Now, to make us feel better, the president says he will “cut” about 60 programs. But to cut 60 programs out of the 10,000 or more programs is nothing to brag about. And no one should expect Bush to fight for these cuts when the time comes. The cuts will go into the budget to make the administration look responsible, for the moment.

At the end of the day, it’s no surprise that we would end up with a $521 billion deficit. We should not obsess over the deficit per se, but we should read it for what it is: a glaring sign that this administration is doing a poor job with our money.

Veronique de Rugy is a fiscal policy analyst at the Cato Institute.