2006 Bush Budget: Road to Doubling Taxes

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The President is yet again proposing a tax payer busting budget. But his advisors' sophistication has grown. In a snapshot of revenues and expenditures, the President may show on paper a deficit cut in half by 2009. But, as anyone who balances a checkbook and has credit cards knows, a snapshot does not give an accurate picture of financial well being. The 2006 spending budget is going up about 8% over last year's. And while the President proposes increasing the spending budget, he at the same time is asking for permanent tax cuts. Anyone who can add and subtract will understand when we are already spending more than we are taking in, cutting our income and raising our borrowing must increase our debt, not lower it.

There are many ins and outs of the budgetary process which can and will lead to endless point - counterpoint debate over the details and priorities. But, the overall picture of the President's fiscal policy is now in fairly sharp focus, and the frightening picture is clear. The Bush Administration's fiscal policy has two long range goals, escalate military and foreign spending, and end Social Security and Medicare.

The President's budget of 2.5 trillion dollars, will cut:

  • farm subsidies
  • the COPs program which makes our streets and homeland security safer
  • educational spending
  • environmental protections
  • business development
and a host of programs designed to aid the poor in America. All this while the President continues to find 100's of billions of tax payer dollars in his budget to give away to the poor of other countries (Tsunami victims), to military dictators (like Musharraf of Pakistan) and Muslims (like the Palestinians), and the medically needy overseas (African's with AIDS while American black women are the fastest growing AIDS victims in America). It is obvious that the President considers his role not as the protector and defender of Americans, but, as world President responsible for all of the world's ill, hungry, oppressed, and weak. And he is using ever more precious American tax dollars to fulfill his dream of world President.

The President refuses to be pinned down as to what his foreign policy will entail, leaving all options for further military action on the table. He refuses to be pinned down on when American involvement in Iraq and Afghanistan will end, when American casualties will cease, and when American tax dollars going to those nations can be returned home for education, health care, and homeland security. Even Congress is nervous over the President's foreign policy strengthening its oversight of CIA secret operations to prevent invasions into other countries based on wrong or false intelligence. The President is digging deeper and deeper into American tax payers future earnings toward some goal of globalization under American supervision. While noble on its face, such behavior is akin to my charging all of my credit cards to the hilt and beyond in order to make a donation to the IRS to save us from our national debt. Noble, but, insane at the very least since, the act would make beggars of my entire family.

Though lacking in many details, the Private Saving's Accounts (PSA's) which the President is trying to sell as a Social Security Reform now has a price tag. That price tag is 4.6 Trillion dollars according to the government. Even VP Dick Cheney admits they will add trillions to the national debt. So, here is the deal. The President offers taxpayers the opportunity to save a part of their Soc. Sec. taxes in an account with their name on it. However, the plan also will add 4.6 Trillion dollars to the national debt, (currently 7.6 Trillion) thus guaranteeing that while you are trying to put money into your PSA, your federal taxes will inevitably have to increase to keep the government solvent. Estimates reflect the PSA's will cost the government 3/4 of a Trillion dollars in just the first 10 years. While you are earning interest on your PSA, you will also being paying record level interest through your taxes to pay the more than 2.5 Billion dollars a day interest on the national debt, (40% of which now goes to investors in China, S. Korea, Japan, Taiwan and similar countries).

Let's do a little arithmetic. Current national debt = 7.6 Trillion. Cost of Private Savings Accounts = 4.6 Trillion. The cost of the President's budgets for 4 years if he cuts it in half by 2009 = 1.75 Trillion. The sum of these equals $13.95 Trillion dollars national debt. Remember, the President came into office with a national debt of about 5.5 Trillion. And when he leaves office he will still be adding a quarter of a trillion dollars a year to the debt. So, the reality is while the President attempts to convince Americans he is fiscally responsible, he is in fact increasing America's national debt 250% over what it was when he first came to office. And what is America getting back for having its future taxes doubled? The answer is less of almost everything except military. Homeland security block grants will even be cut in the 2006 budget.

Even experts in the conservative think tanks agree that growing the economy will not accommodate this kind of massive increase in our national debt. It is just not in the realm of possibility. But, the sophisticated trick of the Bush administration, is to defer the PSA debt until Bush is out of office, excluding it from being accounted for in his budgets. Hence, technically, Pres. Bush can claim he will cut the budget deficit in half by 2009. Another slight of hand that this administration is using is segmenting the budget. The President submitted a 2006 budget proposal to Congress with a 427 billion dollar deficit, which did not include the costs for Afghanistan and Iraq for the 2006 fiscal year or the Alternative Minimum tax which will cost 100's of billions of dollars.

As any financial advisor will tell you, one does not put money in savings at 2% interest earnings while one is paying out 8% interest on one's credit cards. To get ahead, one must pay off the credit cards first, then begin to save. A piece of advice the Bush Administration is completely ignoring at great cost to present and future generation's of tax payers. The President's budget will actually increase spending by between 6 to 8% over last year and continue to grow the nation's already record debt.

Another slight of hand is reported by the LA Times in which it states:

Finally, the budget that the president will send to Congress will, like his past budgets, omit some major deficit-raising items.

It will, as Vice President Dick Cheney said on "Fox News Sunday," be "the tightest budget that has been submitted since we got here." It will hold the growth in domestic programs whose spending levels are set in annual appropriations bills to less than inflation.

But these programs, because they exclude defense and giant benefit programs such as Social Security, account for about $1 of every $5 the government spends.

Most of the cost of the Iraq and Afghanistan wars will not be included in the budget. Instead, it will be sent to Congress as a supplemental budget request for 2006, just as the administration recently announced an $80-billion supplemental request for the current fiscal year.

So, another way in which the President intends to hoodwink the public is by claiming to cut the deficit in his formal budget proposal while removing key elements of it from his initial proposal to be added back in later in supplemental budget requests after he has claimed he cut the budget. This is the kind of smoke and mirrors that got the Democrats in trouble a decade ago when the public realized they were not being given the whole budgetary picture.

Other interesting facts should also be considered but, this article is long enough. However, it is important to note almost 1/3 Trillion dollars per year not collected from individual and corporate taxpayers who legally owe taxes. Yet, IRS budget for collections are proposed to be cut. With all of this information regarding spending, the context is a President who cut taxes for the wealthiest Americans and he intends to make those tax cuts permanent.

Social Security, Medicare, investment in American education and research and development and American ingenuity and creativity are all on track for bankruptcy with the President's fiscal policy carried forward. Simply put, his revenue cuts will benefit the wealthy (for awhile), and his spending cuts will hurt working and poor Americans, and that is the bottom line of the Bush fiscal policy, today and for decades to come with the policies he is putting in place. Without a miracle, Americans are on a path to seeing their taxes double as a result of the President's policies.

2 Comments

David,

It seems that Bush's faltering Social Security scam will be DOA, that's if it ever reaches the Congress in some form. But, I'm of the mind that by scheduling this fiasco first on his second term agenda, the same amount of scrutiny will now be applied to his convoluted budget proposal, and Health Insurance boondoggle, for starters.

Aggravating the situation, will be the still mounting cost of his Drug bill and incredulous attempt to keep future war costs, proposed tax cuts and SS overhaul costs, off budget. As his proposed deep cuts in spending resonate out to unhappy taxpayers, I'm wondering if you think that I'm off base on this next declaration.

His request for an addition $80 Billion for Iraq, will not pass.

Bert, polls still show Americans think the effort in Iraq is worth pursuing. And Iraq is a policy decision that the GOP and Republican Congress persons must defend at all costs.

Therefore, I believe his supplemental request for Afghanistan and Iraq will pass. However, there is a growing possibility that the amounts he is asking for will get much closer scrutiny and debate this time around.

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This page contains a single entry by David R. Remer published on February 7, 2005 7:50 PM.

America: Government and the Christian Right. was the previous entry in this blog.

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