Taxes & Spending

Fight for the Bush Budget

The budget that President Bush presented to Congress last week was the most fiscally conservative blueprint of his presidency so far–which unfortunately is not high praise. With luck, this budget document is the beginning of a new, more financially sound course for the Republicans in Washington.

In his first term, President Bush enacted budgets that were among the most fiscally reckless in a quarter century. The budget grew at twice the pace that it did under Bill Clinton. The Reaganite tight-fisted rhetoric of the Bush Administration in the first term was belied by the reality of the fiscal meltdown in Washington. Bloated Bush budgets, which were only padded with more grease and fat by Congress, created spending growth not matched by any President since LBJ, and a soaring budget deficit of $400 billion.

New Restraint

Bush’s new budget is a departure from the budget bloat and carefree spending ways of 2001-2004. If Bush sticks to his guns on this budget, federal domestic outlays will grow at a slower pace than at anytime since the mid-1990s. The budget calls for the elimination of more than 100 wasteful and obsolete programs ranging from vocational education grants to wasteful urban renewal grants for cities to Amtrak subsidies. Domestic spending would grow at less than inflation and some agencies, such as Energy and Housing and Urban Development, would see overdue deep cuts.

Fiscal conservatives can legitimately complain that the $2.6-trillion budget is still too spendthrift at a time when we are still fighting the Iraq War and a War on Terrorism. As a Cato Institute analysis reveals, there are additional funds in this budget request for a multitude of domestic policy agencies and bureaus that the federal government has no business spending money on. There is $260 million for coal research subsidies, $28 billion more for college student aid, $300 million more for the NASA Mars project, and $1.5 billion for high school aid. The foreign aid budget would rise by 22% under what the White House calls its “leanest budget yet.” Thanks to all the new school initiatives, spending on the Department of Education will now exceed $64 billion–more than twice its spending level in 1995.

Bush budget chief Josh Bolten says this budget will help rein in out-of-control health care expenditures, but the Medicare budget balloons by almost 8%. Meanwhile, the Medicare prescription drug bill enacted over the protests of fiscal conservatives in Congress only18 months ago has just been re-estimated to cost an extra $100 billion over the next decade. Bush says rightly that he wants to cut back on farm payments in this budget (limiting payments to any farmer to $250,000 a year). But wait. Just three years ago he signed into law the most expensive pork-laden farm bill in American history.

But on the biggest federal program of all, Social Security, Bush wants to move power out of the bureaucracy and into the hands of the individual workers. Bravo. This is the one golden light in the President’s budget, and if he succeeds, big government will never be the same again as several hundred billion dollars a year is returned to taxpayers.

The key to the Bush budget is enforcement and a steely commitment to holding Congress to these spending totals–and not a dime more. Bush needs to defend this budget with a sharpened budget veto knife. Otherwise the budget isn’t worth the 892 pages that it’s printed on.

Winning this fight is critical to the conservative movement and the future of Republican governance. The GOP has lost credibility with the public at large, and conservatives in particular, over their stewardship of the budget. Of course, the Bush Administration has been forced to fight the war on terrorism, and that has been a costly, but absolutely necessary, war to fight. But the increase in funding for guns has not corresponded with a reduction in spending on butter. That has meant debt-laden budgets that have voters confused about whether Republicans still believe in smaller government.

The last line of defense in this budget will have to be the House conservatives. Rep. Mike Pence, the Indiana Republican who now heads the Republican Study Committee, the organization of House conservatives, says “he and his conservative colleagues in the House will make budget restraint the very top priority in 2005. We have to re-establish our fiscal conservative credentials.”

He’s right. Republicans need to prove they can pinch pennies and be good stewards of American tax dollars. They have to prove they can get rid of agencies that provide nowhere near the public benefits commensurate with their annual cost. And they have to set priorities so that the deficit can be cut in half as President Bush has promised.

The Bush budget is a promising start to the fiscal debate. It includes the vital policy goals of the next 18 months: winning the war against terrorism, restraining domestic social spending, making tax cuts permanent, slashing the deficit in half and creating a real New Deal for Social Security. That’s a full plate for the Republicans. But it was precisely to achieve these goals that conservatives have worked so hard to secure the Republican majorities in the House and Senate. So, yes, Bush’s budget is worth Republicans’ fighting for. Whether they do or not will go a long way toward determining whether the GOP deserves the governmental power that they have been entrusted with.

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