Alert Denver Post reader Michael Oberbeck noted the contrast between two headlines in Friday’s Denver Post. On Page 2A, the headline read: “Bush will seek extra $70 billion for wars.” On Page 4A, another announced: “$70 billion tax-cut bill gets a win in the Senate.”
What’s wrong with this picture?
Clearly, the federal deficit continues to grow at an unsustainable pace even while the president spurs Congress for still more tax cuts. Worse, the few economies Congress has sanctioned have come out of the hides of the poor, the sick and students struggling to get an education.
The latest $70 billion Bush is seeking to underwrite the wars in Iraq and Afghanistan is only the latest installment in a struggle that has already cost $250 billion since the invasion of Iraq. The bill for natural disasters such as Hurricane Katrina has already passed $42 billion – but the costs imposed by the political disaster known as the Medicare prescription drug benefit is much higher, now priced at $720 billion over 10 years.
One reason Medicare drug costs are out of control is because Congress bowed to demands of drug companies and prohibited Medicare from negotiating quantity discounts. The Veterans Administration already saves taxpayers billions by negotiating just such discounts.
A similar solicitude for wealthy special interests at the expense of the public came in the budget passed by House Republicans 216-214 Wednesday, without a single Democratic vote in support. It included cuts in student loans and Medicaid benefits. As passed by the Senate, the bill would have forced insurance companies and drug manufacturers to absorb some of those cuts. But lobbyists howled in protest and the House quickly shifted the burden of budget cuts back to taxpayers in the form of higher co-payments.
While the cuts enacted by the House will prove painful to students and the poor, their estimated $39 billion in savings over five years was barely half the $70 billion in new tax cuts ladled out by the Senate Thursday. The Senate action did include a necessary and overdue provision to keep the Alternative Minimum Tax from biting deeply into middle-class budgets. But it was also festooned with lagniappes for investors, such as a two-year extension of the 15 percent rate on dividends and capital gains.
Congress won’t even pretend to balance the budget.
