On Monday, President Bush releases his budget for fiscal year 2005, which begins on Oct. 1. It is likely to be the most contentious of his presidency. Those on both the left and right have strong reasons to oppose key aspects of it. Consequently, it probably will be "dead on arrival," even though Bush's party controls Congress.
Democrats will play the same game they always play -- condemning the deficit while simultaneously attacking the budget for being miserly in its treatment of education, health and any other issue on which they can score political points. They will say over and over again that the Bush tax cuts -- and ONLY the tax cuts -- are responsible for the deficit. But at the same time, they will make no serious effort to rescind them.
Republicans, on the other hand, have grown increasingly distressed at Bush's budgetary profligacy. They will denounce proposed increases in spending everywhere outside the area of national security. However, without strong White House pressure to hold down spending, it is likely that congressional appropriators will again lard the budget with layers of pork barrel spending. Since they know that there is zero chance of a presidential veto, there is really nothing to stop them. After all, it is an election year for Congress, too.
At the end of the process in September, our nation's fiscal situation will probably be in even worse shape than it is now -- and that is very bad indeed, according to a report released last week by the Congressional Budget Office. Although the deficit is projected to disappear by 2014, this is only by making completely unrealistic assumptions, which CBO is required by law to make.
Chief among these is the assumption that all tax cuts enacted in the last 3 years will expire on schedule and that no new tax changes are enacted. It is important to remember that the price Republicans had to pay for using special legislative procedures in the Senate to avoid a filibuster is that all tax cuts enacted since 2001 will expire some time before 2010. Extending all of these provisions would reduce federal revenues by $2.3 trillion between 2005 and 2014.
Of course, no one believes this will happen. Indeed, it is a major goal of the White House and Republicans in Congress to make every tax cut enacted since 2001 permanent. However, the chances of their doing so this year are nonexistent. That would require 60 votes in the Senate -- a few too many at the present time. The most we can expect is a temporary extension of provisions expiring this year, but even those can be put off until next year without raising anyone's taxes.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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