I was working at my project house on Tuesday night and had trouble finding the president's State of the Union speech on the radio. By the time I found it on NPR, I missed the first 10 minutes but did get to hear the Democratic response in its entirety. I'm not sure who selected Virginia Governor Tim Kaine as the speaker for the Democratic response, but if Kaine was the best choice for Democrats then their party is in serious trouble. I'll comment later about Kaine's "better way".
I found the text of Bush's speech on the White House website to read what I missed. I don't want my daughters' generation to inherit a nation drowning in government debt, so I was keen to know what he had to say about spending. I found these words interesting:
Keeping America competitive requires us to be good stewards of tax dollars. Every year of my presidency, we've reduced the growth of non-security discretionary spending, and last year you passed bills that cut this spending. This year my budget will cut it again, and reduce or eliminate more than 140 programs that are performing poorly or not fulfilling essential priorities. By passing these reforms, we will save the American taxpayer another $14 billion next year, and stay on track to cut the deficit in half by 2009.What exactly is "non-security discretionary spending" (hereinafter referred to as NSD)? NSD is all discretionary government spending minus expenses related to defense, international and domestic (homeland) security. It represents just under 16% of the federal budget, and by the way--it's the only part of the budget that isn't growing rapidly (ballooning is the word used by the Wall Street Journal). Yes, even the traditionally conservative Wall Street Journal wrote an article critical of the expanding Bush budget. Bloomberg has an interesting article related to this subject as well.
Overall federal spending is up 42% under Bush according to numbers from the non-partisan Congressional Budget Office (CBO). Rising interest payments on the growing national debt as well as rising interest rates both contribute to the increased federal spending since interest on the national debt accounts for 8% of federal expenditures. Bush's new prescription drug benefit plan increases the cost of Medicare, so this too contributes to the problem. The CBO projects interest costs will increase 18 % in the current fiscal year, and Medicare will rise 17%. One thing to note is that neither interest on the debt nor Medicare expenses are mandatory expenditures and therefore don't fall into "non-security discretionary spending".
Bush indicates that "these reforms... will save the American taxpayer another $14 billion next year, and stay on track to cut the deficit in half by 2009." While $14 billion is a start, it's only 0.5% of projected federal spending in 2006. What Bush omits from his statement is that the entire federal deficit is projected to rise 6.3% this year from $317 billion last year to $337 billion this. These CBO numbers don't take into account the $138 billion Bush will ask Congress to approve for military operations in Iraq and Afghanistan as well as hurricane relief. If Congress approves this request, the deficit will rise at least 26% this year from $317 billion to over $400 billion. Yikes!
I truly hope President Bush, the Republican-controlled Congress, and the Republican-controlled Senate are as serious about fiscal discipline as they claim, but so far their actions speak louder than words.
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