Mr. Bush's Deficit Dance
HAVING PILED UP record deficits, President Bush now promises black ink by 2012 -- three years after he leaves office. The fiscal 2008 budget the president submitted to Congress yesterday shows Mr. Bush's purported path to a $61 billion surplus by 2012. Some of its approaches, particularly the effort to restrain the growth of Medicare through additional means-testing and cutting payments to providers, are commendable; they merit more serious consideration by Congress than they appear destined to receive. The administration also deserves credit for a more candid acknowledgment of the likely cost of the war in Iraq than in budgets past. For the first time, the administration included a realistic estimate of the cost of operations in Iraq and Afghanistan for the coming year, $145 billion.
Yet Mr. Bush's balance is more illusory than real. It ignores known costs such as ameliorating the impact of the alternative minimum tax, which would top $90 billion in 2012 alone; the administration, once again, would simply affix a one-year patch for 2008. It assumes the government will collect far more revenue than the Congressional Budget Office projects, amounting to a $150 billion difference in 2012. No one should start spending Mr. Bush's projected surplus.
The more fundamental problem with Mr. Bush's supposedly balanced budget is its fundamentally unbalanced approach. He squeezes social programs while his tax cuts remain untouchable. An administration serious about fiscal prudence would have acknowledged that political and fiscal reality -- a new Democratic Congress, the ever-mounting costs of war -- demand reconsideration of some of the tax cuts. Instead, Mr. Bush yesterday insisted once again on extending them, at a cost of $1.6 trillion over the next 10 years.
That's not sustainable, particularly in light of the squeeze the administration wants to put on domestic spending. On top of emergency spending for the war, it would hike outlays for defense and homeland security by 10.7 percent next year and 23 percent over five years. By contrast, domestic discretionary spending would, depending on how you measure it, grow slowly -- 1 percent over each of the next five years, according to the administration's figures -- or actually shrink slightly.
Either way, the money available would increasingly fall behind as the population grows and inflation erodes the funding's purchasing power. A Democratic Congress is not going to accept -- nor should it -- cutting health insurance for low-income children or fuel assistance for the elderly while extending tax cuts for millionaires.
If Mr. Bush's budget is dead on arrival in this Congress, that increases pressure on the leadership there to come up with its own approach. Democrats have a new responsibility to propose realistic solutions to difficult problems and to demonstrate that they are willing to make the kinds of painful trade-offs for the country's long-term fiscal health that the president, once again, has ducked.