Budget Time -- 2/7/06
It's budget time. You can find coverage in all the morning papers of the $2.77 trillion budget Bush submitted to Congress yesterday. (See, for instance, David E. Sanger, Bush Budget Plan for $2.77 Trillion Stresses Security, NYT, 2/7/06.) While $2.77 trillion sounds like a lot of money, a closer look shows that the administration plans to cut a lot of domestic programs -- education, agricultural, and social -- and the budget doesn't even include spending for rebuilding New Orleans or maintaining the wars in Afghanistan and Iraq. What it does do is to expand spending on national security and the military and it makes President Bush's tax cuts permanent. Because of that, we will continue to spend far more money than we bring in, increasing the national debt. (See Figure 18.3 in KTR, p. 783.)
Very few politicians this morning indicate that the budget will be passed as it is. Members of Congress of both parties who face reelection this year are wary of cuts to programs that their constituents value and conservative Republicans are concerned that Bush is unable to rein in spending and practice the fiscal conservativism he likes to preach. There is excellent coverage of this in the Wall Street Journal, but unless you have a subscription, you cannot access the site. The paper points out that the decisions are so tough that Congress may not be able to act on some of them until after the November election.
We explain the politics of the budget process on pp. 781-789 of KTR. It is a complex process, but, basically, budgets are asked to do a lot of work in a democratic system. They are tools for helping to maintain economic stability through the use of taxing and spending (called fiscal policy) but since the lawmakers who propose and approve budgets are elected officials, they are subject to all sorts of demands from the people who put them in office. But at the end of the day, government policy makers face the same economic laws the rest of us do when we make spending decisions. If we spend more than we bring in, we run into debt. What is not paid for today must be paid for with interest tomorrow. We can practice all kinds of fiscal gymnastics or make rosy assumptions about the future to hide that fact from ourselves, but it's ultimately a matter of money in and money out.
Bush's budget involves reducing permanently the money we bring in (through tax cuts) while spending increasing amounts of money for national security and the military -- goals that may not be compatible, as the WaPo's Jonathan Weisman points out. (Budget Plan Assumes Too Much, Demands Too Little, 2/7/06.)
Also in the papers this morning is coverage of the Senate Judiciary hearings into the warrantless spying by the NSA. Charles Babbington, of the Post, shows that this is not a simple partisan issue. While Democrats are mostly opposed to Bush's assumption of executive authority here, even many Republicans are worried about the implications of stregthening the presidency to that degree. (Activists on Right, GOP Lawmakers Divided on Spying, 2/7/06.)