There are some things to cheer about in President Bush’s new budget proposal. But it also includes plenty of evidence to convince budget watchers that the death of budget profligacy in Washington is greatly exaggerated.
First, the cheers. It seems that Mr. Bush is committed to scaling back the growth rate in domestic discretionary spending, which is composed of non‐defense spending other than entitlements programs like Medicare and Social Security. The president’s proposal cuts $3 billion in this category, or roughly 1 percent. That’s certainly a good thing, since under his watch that portion of the budget has grown by 36 percent. During his first term, Mr. Bush submitted guns and butter budgets that did not reprioritize federal spending: large increases in defense budgets to fight the wars in Afghanistan and Iraq and to fund homeland security programs were accompanied by large increases in the non‐defense budget.
The $3 billion in overall cuts, however, is somewhat paltry. The cuts do target some high‐profile programs: There is a proposed elimination of Amtrak subsidies, and there are cuts to housing programs and the termination of some corporate welfare programs such as the Advanced Technology Program. But together these are not enough to substantially chip away at the massive budget buildup the White House and Congress have engaged in for the past four years.
The only Cabinet‐level agencies in this budget that have smaller proposed budgets than when Mr. Bush took office are the Departments of Labor and Transportation, and the Environmental Protection Agency. All the rest have grown by leaps and bounds since Mr. Bush’s first day in office. For instance, the new Bush budget proposes that the Department of Education will be 40 percent bigger than it was in 2001, and that the Department of Commerce will be 85 percent bigger.
In addition, all the savings from these cuts are swallowed by an increase in spending in other programs that weren’t touched. In fact, in the first few pages of the budget document, the president outlines 37 new or expanded initiatives on which to spend taxpayer money. Here’s the bottomline: the new Bush budget actually proposes an overall 3.6 percent increase in all spending for 2006. Non‐entitlement spending, including defense, will increase by 2 percent.
Unfortunately, Mr. Bush may have started the budget bidding too high. Once Congress gets its hands on the budget, all proposed cuts go out the window. Indeed, the president’s proposals are usually seen as spending floors, not ceilings. Congress ratchets up the spending almost from the minute the president’s budget reaches Capitol Hill. Over the past four years, Congress appropriated $187 billion more than Mr. Bush proposed in defense and domestic spending. By refusing to veto a single bill in his first term, Mr. Bush did nothing to stop this budget ratchet.
Because he refused to battle the budget ratchet in his first term, the president is going to have to push even harder to keep his spending cuts intact. The only way this will work is if he threatens to veto any budget bill that is more expensive than what he proposed.
Mr. Bush has seen what a veto threat can do. His threat to veto the bloated highway bill last year, if the price tag were larger than his proposal, led to substantial bickering among Republicans in the House and Senate over what spending level would trigger a Bush veto. This killed the prospects of passing that bill by the end of the year, and current deliberations over the bill are in doubt. The president needs to wield the veto threat more often if he plans to scale back the ratchet effect that he encouraged during his first term.
Republicans have a stronger level of control over both houses of Congress. They have a re‐elected and confident president. They have run out of excuses as to why they haven’t controlled spending. The budget ratchet is their problem. If they don’t cut spending, it will not be because they can’t. It will be because they don’t want to.