The $2.9 trillion budget presented by President Bush for the 2008 fiscal year fails to chart a realistic plan to reduce the massive federal deficit or even pay for the mounting costs of the war in Iraq.
It’s not hard to find the tragic flaw in this budget drama. Bush’s spending plan fails because of his determination to make his tax cuts for wealthy Americans a permanent part of the economic landscape.
To maintain the illusion that he can preserve tax breaks averaging $160,000 per year for families with incomes above $1 million while still balancing the budget within five years, the president called for spending cuts he knows Congress won’t make and invokes absurdly rosy scenarios for economic growth. Even more cynically, the budget assumes Congress will tolerate a massive tax increase on middle-class Americans in the form of the runaway alternative minimum tax beginning in 2009.
Bush did make an important advance toward candor by including $145 billion for operations in Iraq and Afghanistan in his basic budget. For years, we have criticized Bush for financing the war in “supplementals” outside the normal budget process.
Unfortunately, the realism is limited to 2008, since Bush’s projections allow only $50 billion in 2009 and nothing in 2010 for the twin conflicts. Absent such wishful thinking, the ongoing costs of the conflicts will rule out a balanced budget in 2012.
The question of whether we should be fighting in Iraq at all is politically controversial. But unquestionably, if we continue waging that costly conflict, the president should have a responsible plan to pay for it. From World War II through Vietnam, the government has financed major conflicts by calling on the public to sacrifice, curbing some popular domestic programs and raising taxes when necessary. Ronald Reagan didn’t face a big shooting war but did oversee a major military build-up as part of his plan to win the Cold War. As the costs of that buildup became clear, Reagan accepted what was at that time the largest tax increase in U.S. history. In the end, his vision was justified by the fall of the Berlin Wall.
Contrasted to the vision of Reagan, President George W. Bush has fallen lamentably short of facing the economic consequences of the conflicts in Iraq and Afghanistan.
There is one major area, however, where we do like the president’s sense of priorities. That area is in energy, where an inadequate overall spending plan masks a commendable shift away from carbon-emitting fossil fuels to promoting alternative energy sources that can ease air pollutants.
Frankly, we agree with New Mexico’s Republican Sen. Pete Domenici that Bush should “add a zero” to his proposed $9 billion in loan guarantees for alternative energy projects. But leaving aside such parochial issues as whether the vital National Renewable Energy Laboratory in Golden got a slight cut or a slight increase (it depends on what you use as a base), we like the fact that Bush, a former oilman, zeroed out funding for research and development of oil and natural gas and redirected that money to research “clean coal” technologies that would not emit carbon dioxide.
The budget requested $179 million, about double this year’s spending, for research into biofuels, especially development of cellulosic ethanol as a substitute for gasoline. It also requested $802 million, nearly double from this year, for advanced nuclear power research.
The worst part of the energy budget would cut federal support for state and local weatherization programs that help low-income Americans make their homes more energy efficient by 35 percent. Congress should reverse that cut and funnel even more cash into conservation programs. Let’s not forget that simple conservation is always the cleanest, and usually the cheapest, alternative energy source of all.
