Budgetary Woes
The budget is on the minds of everyone these days, and is causing many people some major heartburn.
For
example – just how is Nussle going to run for governor if he has to
back immediate severe cuts in Agricultural programs? There
was some nice “act tough but duck the consequences” rhetoric from Mr. Nussle yesterday:
“The
Congress doesn't have to stick to these (White House) priorities,” said
Senate Budget Committee Chairman Judd Gregg, a New Hampshire Republican.
“There are some programs in there I have heartburn about.”
House
Budget Committee Chairman Jim Nussle, an Iowa Republican, warned his
panel not to refuse spending cuts unless they could come up with
alternative savings.
“Put up or shut up,” he said. “You've got to come forward with a proposal. It's not good enough to just complain.”
But
Nussle admitted he was worried about proposed farm-aid cuts which could
affect Iowa, a farming state where he may run for governor. “I don't like some of the cuts I've seen in the agricultural budget,” he said.
Not only is Nussle having issues, but that presicription drug benefit “reform” to Medicare is having some serious issues:
The
White House released budget figures yesterday indicating that the new
Medicare prescription drug benefit will cost more than $1.2 trillion in
the coming decade, a much higher price tag than President Bush
suggested when he narrowly won passage of the law in late 2003.
The
projections represent the most complete picture to date of how much the
program will cost after it begins next year. The expense of the new
drug benefit has been a source of much controversy since the day
Congress approved it, with Democrats and some Republicans complaining
that the White House has consistently low-balled the expected cost to
the government.
As
recently as September, Medicare chief Mark B. McClellan said the new
drug package would cost $534 billion over 10 years. Last night, he
acknowledged that the cumulative cost of the program between 2006 and
2015 will reach $1.2 trillion, but he cited several major savings and
offsets that he said will reduce the federal government's bottom-line
cost to $720 billion.
It seems that Chuck Grassley, the “lead architect” forgot to include a roof, and didn't notice the leaky basement, either.
The
biggest question that Iowans (and Americans) need to ask: just
where is all of this money going that we can't afford to pay for, well,
anything?
Paul Krugman addressed this yesterday in reference to the ongoing Social Security phase-out debate:
The attempt to “jab a spear” through Social Security complements the
strategy of “starve the beast,” long advocated by right-wing
intellectuals: cut taxes, then use the resulting deficits as an excuse
for cuts in social spending. The spearing doesn't seem to be going too
well at the moment, but the starving was on full display in the budget
released yesterday.
To put that budget into perspective, let's
look at the causes of the federal budget deficit. In spite of the
expense of the Iraq war, federal spending as a share of G.D.P. isn't
high by historical standards – in fact, it's slightly below its average
over the past 20 years. But federal revenue as a share of G.D.P. has
plunged to levels not seen since the 1950's.
Almost all of this
plunge came from a sharp decline in receipts from the personal income
tax and the corporate profits tax. These are the taxes that fall
primarily on people with high incomes – and in 2003 and 2004, their
combined take as a share of G.D.P. was at its lowest level since 1942.
On the other hand, the payroll tax, which is the main federal tax paid
by middle-class and working-class Americans, remains at near-record
levels.
You might think, given these facts, that a plan to reduce
the deficit would include major efforts to increase revenue, starting
with a rollback of recent huge tax cuts for the wealthy. In fact, the
budget contains new upper-income tax breaks.
Any of
this false posturing from our Republican reps is dishonest at a very
basic level: they pretend to “fight” for programs (and a society)
that they don't believe in.
In the
meantime, phasing out Social Security, destroying Medicare by
bankrupting it, and slashing the very programs that protect average
Americans from basic economic security put on full display what this is
all about – an attack on the very foundations of economic security that
average Americans have relied on for the better part of this century.
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