Here are some notes on the federal budget released by the Bush administration today:
- Total outlays are scheduled to rise 7.4 percent in FY2008. But if the $100 billion in stimulus "rebates" were properly counted as added spending instead of tax cuts, FY2008 outlays would be up an even larger 11.0 percent.
- Bush proposes that FY2009 outlays be increased by 6.0 percent.
- This adminstration loves spending, and does not know how to actually cut the budget. According to the "Spending Discipline" section of the budget (page 7), the administration proposes "the termination and reduction of 151 programs for a savings of over $18 billion, a step that will help channel resources to more effective programs." The administration doesn't have the backbone to say that spending will be cut — period. Instead, it nearly always promises that any savings will be spent elsewhere.
- In a continuation of its dishonest accounting for the alternative minimum tax (AMT), the administration again includes only one year of AMT relief. Yet the debate over the AMT in 2007 showed decisively that both Congress and the president, both Democrats and Republicans, will continue to pass AMT relief that is not offset. The administration should have included either full AMT relief through 2013 (or, better yet, AMT repeal) in the budget.
- And in a continuation of dishonest accounting for the "Global War on Terror," the budget includes no funding for years after 2009. The GWOT cost roughly $200 billion in both FY2007 and FY2008, funded through "emergency supplementals." In the new budget, the administration includes just $70 billion for the GWOT in FY2009, when in fact the cost will be likely much higher. The bottom line is that the FY2009 deficit will be well over $500 billion, not the $407 billion that the administration claims.
Let's compare total outlays as a share of GDP over eight years in office for various presidents:
- Over Ronald Reagan's eight years, outlays decreased from 22.2 percent to 21.2 percent.
- Over Bill Clinton, eight years, outlays decreased from 21.4 percent to 18.5 percent.
- Over George W. Bush's eight years, outlays will increase from 18.5 percent to 20.7 percent.
Given that all spending is paid for by either current of future taxes, Bush's spending increase of 2.2 percent of GDP is a roughly a $300 billion annual tax increase. (This year's GDP is about $14 trillion).