The Budget's Message to Taxpayers: You Lose


Reporters, talking heads, and politicians have been combing through President George W. Bush's first budget looking for its "winners" and "losers." On Tuesday, the Washington Post headed an entire page, "Bush's Budget: Who Gains and Who Doesn't." The feature listed programs and departments, such as medical research, the IRS, and the department of education's Title I program, for which Bush wants to increase funding and those such as the Army Corps of Engineers, Energy Department solar and wind power research, and the Commerce Department's Advanced Technology Program, that will get less money than in previous years.

But taxpayers don't have to pore over the more than 1,200 pages of the budget documents–or even be strong enough to bench-press them–to know the outcome of this year's budget. Taxpayers, take this to the bank: You lose. Everyone else wins.

Bush's proposed spending increases will be embraced by Republicans and Democrats in Congress. Any cut will be fought over and, more often than not, changed into an increase. It doesn't matter how slight or imaginary (when Congress "cuts" a program, that means it typically gets as much or more money than this year, but not enough to keep up with inflation or population growth). Cuts, by and large, simply won't be allowed.

Bush's proposed budget is a whopping $1.96 trillion, up from $1.4 trillion when our last president took office. In a year in which the economy is expected to struggle, Bush's opening offer would grow federal government spending by 4 percent. Such largess, however, hasn't muted congressional Democrats who, however much they desire bipartisanship, can't stop braying about Bush's "cuts." "Cutting every conservation program in every department of the government," Rep. John Spratt (D-SC), the senior Democrat on the house budget committee told the Post. "These are compassionate cuts?" That liberal advocacy shop, The Center on Budget and Policy Priorities, complains that Bush's budget only jacks spending by 0.4 percent, not 4 percent. The reason, among other things, is that Bush budgets $5.6 billion for natural disasters, such as earthquakes and floods, instead of just funding them as they arise.

As the CBPP gripe indicates, Bush's budget is in many ways a responsible sort of document. It recognizes that to budget is to choose, and it acknowledges on some level that to do more of a good thing often means doing less of something else. The bipartisan insistence that no program ever experience a cut is premised on the belief that everything the nearly $2 trillion federal government does is necessary. Programs–for example, an Agriculture Department beauty that pays farmers, or hunters masquerading as farmers, not to farm wetlands–are certainly important to those who get the checks from the U.S. Treasury. But they may not be of much use to anyone else. This isn't necessarily a libertarian point. Thoughtful liberals and middle-of-the-road wonks recognize this as well. As journalist Jonathan Rauch points out in Government's End: Why Washington Stopped Working, the only way for government to do new good things, such as provide seniors with drugs, is for it to do less of things that may have been urgent in an earlier day but are no longer.

Bush's budget does lay out priorities. He wants to give the Education Department more money. Those who serve our country in the armed forces get a good raise—4.6 percent. Medical researchers at the NIH will get a $2.75 billion boost. And then there's the tax cut, which will be $29 billion next year, if passed as proposed.

Bush made some tough choices to accomplish these gains. He proposes a 25 percent cut in funding for the Export-Import Bank, a useless dispenser of corporate welfare. He wants to reduce by $145 million one of Bill Clinton's favorite programs, the Community Oriented Policing Services, the bogus plan to federally fund 100,000 new cops. Now that the American frontier and backwoods have access to both electricity and telephones, Bush wants to reduce federal funding for rural electrical and telephone hookups by $40 million. The Army Corps of Engineers, which environmentalists loathe, also takes a massive wallop.

But lest anyone get misty-eyed about Bush the Budget Chopper, consider this: Bush low-balls the true cost of government in 2002. The $319 billion defense budget—the largest single item after Social Security—is simply a placeholder until Defense Secretary Donald H. Rumsfeld finishes his review. Want to bet Rummy's final figure is way higher? And the only large aggregate cut in Dubya's budget is in agriculture. In 2001, with the predictable emergency spending, the feds spent $25.9 billion in the name of farmers. Bush proposes spending just $18.6 billion. Don't expect farmers, who are well arrayed in many congressional districts, to take that hit lying down. Indeed, Sen. Charles E. Grassley (R-Iowa), who sometimes plays a cost-conscious statesman on TV, said in a statement Tuesday, "There is a consensus in the Senate for more money for agriculture and Medicare."

That sort of talk is why taxpayers can leave debates over who wins and who loses to the Post. Taxpayers can safely assume that this year–like every other year–they've already lost. Spending in Washington is a one-way ratchet, and Bush's budget is a floor–a gold-plated floor–not a ceiling. The Senate already approved a budget that doubles Bush's spending increase from 4 percent to 8 percent. And there's more to come. On CNBC's Hardball, Senate Budget Committee Chairman Pete Domenici (R-N.M.) generally praised Bush's budget, although he promised to increase funding for renewable energy. "There's a number of things we are going to fix," said Domenici, which is code for jacking up the spending. The Judy to his Punch on the show, Sen. Robert G. Torricelli (D-N.J.) wanted more transportation funding for his state's commuter railroads. The only partisan difference was that the Democrat bashed the budget before making the case for more money, while the Republican praised the budget before asking for more.

It's fashionable to blame the Senate for going fiscally soft. It was in the upper chamber, after all, where three Republicans misapplied Bush's pleas for bipartisanship and joined Democrats in reducing his tax cuts and increasing spending in the recent budget resolution. But House members crave new spending as well. "It's a credible budget document, a statement of priorities, and as long as there is a willingness by all parties to work on it we can come together," James W. Dyer, staff director of the House Appropriations Committee, told the Washington Post. His idea of coming together is to join the Senate in spending more money. "I don't think this Congress will quibble with the administration's priorities so much as with the reductions he made to fund them," said Dyer, in a rather amazing statement.

The problem in both the House and Senate is that no one's personal interest aligns with that of the general taxpayer. One might think interest groups would view the process as a zero-sum game: More money for scientists, for example, means less for soldiers. But groups are savvy, and they know, from experience, that there's enough for everyone. So Bush's proposal to increase medical research funding has even some in the medical research community upset that their colleagues in other scientific fields don't get more money as well. Ditto for military pay. And hey, civil servants say they need an equivalent pay boost.

Such claims find sympathetic ears in Congress, if not in American living rooms. "There will be a compromise," Rep. Ron Paul (R-Texas), told me in 1999 when I asked him to predict what the 106th Congress would produce in terms of spending. "Conservative will get their type of spending and liberals will get theirs."

Paul was right then and he'll be right this year, too.