Monday, February 12, 2007

MUST READ: David Broder on the Budget

If you really want a breakdown of exactly how people like Representative Scott Garrett are misrepresenting the truth about the President's budget proposal, read David Broder's column printed today in The Record. I've gone through it and looked at the tables referenced, and he's accurate in his reporting of what the proposal has in it. Here are some of the highlights:

It would be wonderful were deficits to disappear -- if only it were true. But on the final page of the document, in Table S-10 on Page 172, one learns the disturbing truth. In fiscal 2012, the president's target year, the gross federal debt will -- by his own estimate -- grow by $372 billion.

How can this be? Well, the Page 1 claim is achieved by ignoring or minimizing a bunch of real-world challenges. For example, the president proposes just a one-year patch for the growing problem of the alternative minimum tax, which is whacking more and more middle-class families who thought they were beneficiaries of the Bush tax cuts. The one-year fix would cost the treasury $47.9 billion, but no revenue is lost in the next four years -- because Bush just ignores the problem.

[snip]

As he noted, Table S-7 shows that the $61 billion surplus Bush claims for 2012 -- using all the gimmicks he can find -- is achieved only by counting on the $248 billion in anticipated Social Security surpluses that year to wipe out the $187 billion deficit rolled up by all the other activities of the federal government.

In other words, Bush is borrowing from Social Security to achieve his budget surplus -- and that money will have to be repaid out of future taxes, or beneficiaries will suffer.

[snip]

In fiscal 2006, the past year, the total federal debt was $8.45 trillion. In 2012, by Bush's optimistic estimate, it will reach $11.49 trillion. That is $3 trillion of added debt in just six years.

More and more of that debt is held by foreign countries. Another table, buried back on Page 234 of a supplemental volume, shows that the foreign holdings of U.S. government securities have more than doubled in the past five years, going from just over $1 trillion to $2.1 trillion. Japan and China are our largest creditors, increasing their leverage over our economy. And Uncle Sam has become the world's biggest borrower.

That's another fact you won't find anywhere in this budget.

This is a far cry from the fiscal conservatism that is supposed to be at the heart of Republican values I grew up with. While the article does point to the fact that the budget is the most honest when in comes to entitlement programs, because of the false promise of a balanced budget by 2012 the President has lost any strength in his arguments.

The debt Washington is straddling future generations with is immoral, because as noted above, it increases the leverage on our economy of places like China. Defending such actions when the facts are on the table, and misrepresenting the intentions of those sounding the alarm is inexcusable.

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