How Much Reform Can Taxpayers Afford?

This article originally appeared in the Washington Times on September 11, 2002.

The current food fight between Republicans and Democrats over who isdoing the most to "save" the Social Security surplus may be a bipartisanplan to avert attention from the more important budget issue: the excessivespending growth projected for many programs that seems to be of littleconcern to either party.

The highest growth rates are projected for those programs that arebeing "reformed." The president's education reform plan, for example, wouldadd $43 billion over 10 years to this traditionally local spendingresponsibility. Education spending would increase 7.9 percent a year underhis plan during the next five years, compared to an expected inflation rateof 2.5 percent.

And yet last week the president urged that "Congress must adjust itsspending attitudes" and not "go hog wild" with spending. Mr. Bush talks thetalk. But his actual policies signify that going hog-wild is OK if it isunder the pretext of reform.

Consider Medicare. Here the administration plans to "modernize" theprogram with a massive injection of $190 billion over 10 years forprescription drug benefits. That figure is up $37 billion from theadministration's April forecast.

Still, taxpayers would get off easy under this plan: Congress hasallowed for a $300 billion Medicare reform plan in its 10-year budgetresolution.

That level of spending would push the cost of Medicare from $218billion this year to $497 billion in 2011, a 128 percent increase. Bycomparison, incomes are expected to rise just 68 percent during this decade,indicating that the average burden on workers paying the bills for thishealth program will rise substantially.

Spending on its sister program, Medicaid, is set to rise from $130billion this year to $301 billion in 2011, a 132 percent increase. Taxpayershad better hope policymakers don't try to "modernize" this program, as well,else spending will rise even faster.

Congress is also going hog wild with farm spending. On top of the justpassed $5.5-billion farm supplemental bill, it is working to reauthorizesubsidy payments that channel billions of taxpayer dollars to farmers whoproduce a few major crops, such as wheat and corn. When farm programs werelast "reformed" under the 1996 Freedom to Farm Act, subsidies were supposedto transition down to $4 billion per year by 2002. Instead, subsidies haveexploded to more than $20 billion per year the past three years, up from anaverage $9 billion a year in the early 1990s.

The House Agriculture Committee passed its version of the new farm billin July. It would spend $168 billion over the next 10 years on farmsubsidies, or $74 billion above baseline spending levels. Ranking committeemember, Charlie Stenholm, Texas Democrat, had the chutzpah to call the billa "good deal for taxpayers."

On national defense, the Bush administration has not so much promised"reform," but a "review." So far the review has found that "unmet needs"require $197 billion in new spending during the decade. Mr. Bush hasincluded these funds in his new budget estimates and promised furtherreviews, so expect the final taxpayer tab to be even higher.

Perhaps increased defense funding levels are appropriate. But isn't ittime for the administration and Congress to come up some major reforms thatactually save taxpayers money? Until that time, taxpayers should besuspicious that policymakers use high-sounding reform rhetoric to cover up alack of will to make the tough budget choices.