Bush Budget Largely Irrelevant In Lame-duck Year

House and Senate Budget Committee Chairs Rep. John Spratt (D-SC) and Sen. Kent Conrad (D-ND) (WDCPix)

President George Bush kicked off the 2009 budget debate Monday, unveiling a $3.1 trillion spending wish list that calls for significant hikes in military funding while scaling back on health care, environmental and low-income assistance programs. Congressional Democrats immediately condemned the proposal, declaring it dead on arrival.”This budget will be quickly forgotten,” Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said in a statement. “But, unfortunately, the president’s legacy of debt will stay with us, as it is passed on to future generations. His stewardship of our budget has been an utter disaster.”

Under the proposal, defense spending would increase more than 7 percent in 2009, to $537 billion, excluding the wars in Iraq and Afghanistan, which would add hundreds of billions of dollars more. By contrast, funding for non-security domestic programs would increase only 0.2 percent. White House officials say the restraint is necessary to control rising deficits and unsustainable long-term spending trends.

…defense spending would increase more than 7 percent in 2009, to $537 billion, excluding the wars in Iraq and Afghanistan, which would add hundreds of billions of dollars more…funding for non-security domestic programs would increase only 0.2 percent.

With those goals in mind, the president’s proposal would trim $18 billion next year by slashing or terminating spending on 151 different discretionary programs. An initiative that helps low-income Americans pay their energy bills, for example, would be cut by $570 million (22 percent) next year under the plan.

Bush also proposed $433 million in cuts to the Centers for Disease Control and Prevention, including programs to detect infectious diseases. The Environmental Protection Agency would suffer about $330 million in reductions under the plan. Most of the EPA cuts come at the expense of state-run waste-water treatment programs, according to analysts at the Center on Budget and Policy Priorities. If Bush’s proposal were to become law, 2009 EPA funding would be roughly $1 billion less than it was in 2004.

The proposal also goes after the nation’s entitlement programs, trimming Medicare by about $178 billion over the next five years. That savings, largely from cuts to service providers like hospitals and physicians, represents a drop in Medicare spending growth from 7.2 percent a year down to 5 percent.

Not that anyone thinks the Bush budget has legs. Senate Finance Chairman Max Baucus (D-Mont.) says he has no interest in promoting the plan. “This administration,” he said in a statement, “ought to know that five years’ worth of Medicare and Medicaid cuts, totaling $200 billion, are dead on arrival with me and with most of the Congress.”

Indeed, with a lame-duck president facing approval ratings near historic lows, many experts predict the proposal will have a short shelf life — particularly in an election year. “There’re really no incentives for Democrats to move on the [president's] budget this year,” said Stan Collender, a former Clinton administration budget analyst who is now a director of Qorvis, a Washington-based communications firm. “There’s nothing in there for them.”

with a lame-duck president facing approval ratings near historic lows, many experts predict the proposal will have a short shelf life

Still, budget proposals offer a clean glimpse at the priorities of any administration. In the case of the Bush White House, much of the focus falls on making the 2001 and 2003 tax cuts — which largely benefit the wealthiest Americans — permanent. Without congressional action, the cuts would expire at the end of 2010.

Administration officials argue that the tax cuts are prerequisite to a healthy economy. Federal overspending — not under-taxing — is the true cause of Washington’s long-term budget woes, they say. “The big challenge here is spending,” said Jim Nussle, head of the White House Office of Management and Budget. “It’s really not revenue. Spending is the problem.”

But critics of the tax cuts contend that the money would be better spent on programs for needier folks. Robert Greenstein, CBPP’s executive director, said that reinstalling the estate tax alone could bring in about $522 billion in the next 10 years — almost the same amount that Bush proposed to cut from Medicare over the same span.

“This is part of a larger theme,” Greenstein said. “The most well off will do extremely well [under Bush's proposal].”

Also under scrutiny is the president’s claim that the spending blueprint would eliminate deficits by 2012. Critics are quick to point out that the administration not only assumes the permanent extension of the 2001 and 2003 tax cuts, but also counts on a much larger number of Americans paying the alternative minimum tax — something Congress has vowed not to let happen.

In addition, the proposal includes only $70 billion for the wars in Iraq and Afghanistan — far less than experts in and outside of the White House estimate the costs will be. Nussle on Monday defended the figure, saying that it represents “a bridge” that will allow the Pentagon to examine its future funding needs when those needs arise.

But the questionable number-crunching has left Democrats screaming bloody murder this week. “The president’s misguided budget cuts health care for seniors and working families,” House Speaker Nancy Pelosi (D-Cal.) said in a statement, “freezes lifesaving medical research, raises health care costs for veterans, and slashes energy assistance — all at a time of rising prices and a slowing economy.”

Conrad said he plans to have the Budget Committee consider the Democrats’ budget alternative in the first week of March, allowing the Senate to vote on the bill before the Easter break. That will set the stage for a showdown with the White House, as Bush has already shown a recent alacrity for vetoing Democratic spending bills — something he never did when the GOP controlled Congress.

Many critics also say that the recent call for fiscal discipline is an odd request from an administration that has presided over some of the largest real-dollar deficits in the nation’s history. Fueling this criticism, the White House announced Monday that deficits are estimated to be $410 billion in 2008 and $407 billion in 2009 — just shy of 2004’s record of $412 billion.

Collender, the former Clinton budget analyst, said those estimates represent a bit of political gamesmanship, as the Bush administration has been known to inflate its deficit estimates early in the year so it can claim victory when the final numbers inevitably come in lower. The 2008 figure, he said, is almost certainly inflated. On the other hand, Collendar estimates that the 2009 figure is probably undercounted “because the next president will have to take responsibility for it.”