Averting a Budgetary Shipwreck

Posted: Feb 11, 2005 12:00 AM

A federal budget is like a cargo ship. A ship leaves port loaded with goods; a budget leaves the White House loaded with goodies. Like a ship, the budget makes many stops before it reaches its final port. And when it arrives, it?s usually carrying different things than when it started.

That?s why caution is in order when it comes to President Bush?s proposed 2006 budget. It?s an excellent step in the right direction. If implemented, it actually would reduce non-defense discretionary spending for the first time in years. It also would kill off, or greatly reduce, some 150 wasteful or redundant programs. That alone would save $20 billion next year.

Plus, it would begin to address the even greater financial problems of entitlement programs, such as Social Security and Medicaid. At the same time, the budget would increase spending in critical areas, such as homeland security and the military. And it would make permanent the pro-growth tax cuts enacted during President Bush?s first term.

But now that this ship is underway, the difficult work of navigating safely begins.

Liberals lined up to condemn the budget as soon as it was released. House Minority Leader Nancy Pelosi, D-Calif., for example, claimed it ?is fiscally irresponsible, morally irresponsible and a failure of leadership.? That response was predictable. Yet the president?s Republican allies haven?t exactly come out in favor of his budget, either.

House leaders Dennis Hastert, R-Ill., Roy Blunt, R-Mo., and Jim Nussle, R-Iowa, described the plan as merely a ?starting point.? As if that signal wasn?t clear enough, Sen. Judd Gregg, R-N.H., of New Hampshire pointed out that lawmakers may like the ?concepts? of the budget, but ?we don?t have to follow those programs.?

Their message seems to be, ?Thank you, Mr. President. We?ll take it from here.? But this year, the White House shouldn?t let that happen. If it does, none of the proposed spending cuts are likely to happen.
Here?s why.

With the usual budget process, the president proposes a spending plan in February. It goes to Congress, and lawmakers spend months working on it. Some time in the fall, the compromise budget appears. Congress passes it -- in recent years, often as a single spending bill. The president has no choice but to either sign the whole thing (even though it no longer resembles his original proposal) or veto it and risk another government shutdown.

Unfortunately, every program, no matter how small or wasteful, has at least one supporter on Capitol Hill. So if the president doesn?t fight for his planned spending cuts, some lawmaker will manage to slip them back into the budget, one by one.

Consider Amtrak. After years of supporting the railroad through wasteful federal subsidies, the president finally said, ?enough.? He eliminated Amtrak?s subsidy.

It?s about time. Amtrak has received more than $29 billion in federal support through the years, including $1.2 billion this year. The railroad loses money on every route it runs, and it serves only a tiny fraction of our transportation needs. In fact, it carries less than 1 percent of the intercity passenger traffic. That?s no way to run a railroad.

But Amtrak has staunch supporters in Congress. As the year progresses, we?ll be able to tell if the president?s plan is on track by watching the railroad. If its usual big subsidies end up in the final package, it will signal that the president?s pitch for fiscal responsibility has failed.

Another key program to watch is farm subsidies. The president wants to trim them by $8 billion over the next decade. That?s an excellent idea.

Farm subsidies are little more than corporate welfare. Though presented as a helping hand for small family farmers, two-thirds of these subsidies actually go to only 10 percent of the nation?s farm operators. Those aren?t families. They?re big agribusinesses that don?t need federal help to stay in business.

But on Capitol Hill, the farm lobby already is fighting to keep its share of the federal pie. As with Amtrak, the amount that Congress eventually devotes to farm subsidies in the final budget will be a good indication of whether President Bush got the budget he wanted.

The president needs to pilot the federal budget ship carefully. If he turns over the wheel to lawmakers, he won?t recognize the budget when it comes back to him.

However, if he stays involved in the process and insists that lawmakers work with him, there?s no reason we can?t arrive safely in port with a smaller federal budget -- and a lower burden on the American taxpayer.