Bush 2005 budget to be released Monday

[Natoma]

http://www.cnn.com/2004/ALLPOLITICS/01/30/bush.budget.ap/index.html

The president's budget, to be released Monday, will also project a federal deficit this year of about $520 billion, congressional aides said. That would far exceed this year's $375 billion, the highest ever in dollar terms.

The budget will estimate the price of retooling Medicare and adding prescription drug benefits at $534 billion over the decade ending 2013, officials said. The figures, first revealed Thursday by congressional aides speaking on condition of anonymity, were confirmed by administration officials.

While hunting for the votes they needed to nudge the bill through, Bush and administration officials as well as top congressional Republicans told wavering conservatives they believed the bill's costs would track the nonpartisan Congressional Budget Office's $395 billion estimate.


.....

Other conservatives said privately they were owed an explanation as to why the White House did not provide them with the figures before they voted. Administration officials said the new cost estimate was not ready until now.

"Very messy," said Joe Antos, a health policy expert at the conservative American Enterprise Institute, describing the reaction among conservative lawmakers.

He said many of them felt "brow beaten" into backing the legislation, which passed the House in November by five votes after leaders held the roll call open nearly three hours while nailing down support.

.....

Meanwhile, the administration released some positive news about their forthcoming budget, including proposals for:

• $45 million -- a fourfold increase -- for cleaning up the Great Lakes.

• An $18 million increase -- to $122.5 million -- for the National Endowment for the Arts.

• $60 million for a cattle identification system and other mad cow-related programs, up from $13 million this year.

Wonderful. More and more spending, yet no revenue streams to compensate for it. A 20% overall reduction, as a % of GDP, in tax revenue, along with a 26% overall increase in spending in that same time. Yay deficits. The red ink grows.

 

[diarrhea_splatter]

http://www.cnn.com/2004/ALLPOLITICS/01/30/bush.budget.ap/index.html

The president's budget, to be released Monday, will also project a federal deficit this year of about $520 billion, congressional aides said. That would far exceed this year's $375 billion, the highest ever in dollar terms.

The budget will estimate the price of retooling Medicare and adding prescription drug benefits at $534 billion over the decade ending 2013, officials said. The figures, first revealed Thursday by congressional aides speaking on condition of anonymity, were confirmed by administration officials.

While hunting for the votes they needed to nudge the bill through, Bush and administration officials as well as top congressional Republicans told wavering conservatives they believed the bill's costs would track the nonpartisan Congressional Budget Office's $395 billion estimate.


.....

Other conservatives said privately they were owed an explanation as to why the White House did not provide them with the figures before they voted. Administration officials said the new cost estimate was not ready until now.

"Very messy," said Joe Antos, a health policy expert at the conservative American Enterprise Institute, describing the reaction among conservative lawmakers.

He said many of them felt "brow beaten" into backing the legislation, which passed the House in November by five votes after leaders held the roll call open nearly three hours while nailing down support.

.....

Meanwhile, the administration released some positive news about their forthcoming budget, including proposals for:

• $45 million -- a fourfold increase -- for cleaning up the Great Lakes.

• An $18 million increase -- to $122.5 million -- for the National Endowment for the Arts.

• $60 million for a cattle identification system and other mad cow-related programs, up from $13 million this year.

Wonderful. More and more spending, yet no revenue streams to compensate for it. A 20% overall reduction, as a % of GDP, in tax revenue, along with a 26% overall increase in spending in that same time. Yay deficits. The red ink grows.

Why the hell vote without seeing any numbers? sounds like propaganda

 

[digitalwanderer]

Wow! Sounds like Bush is turning into Santa Claus, and just in time for the election too! :|

 

[epicstruggle]

Wow! Sounds like Bush is turning into Santa Claus, and just in time for the election too! :|

Thats really not the problem. Its the other 500+ Santa Claus wannabes in congress. They have no concept of saving. No difference between Dems and Reps. They just cant control themselves with our money.

God I wish we could start a movement for a balance budget amendment(with provisions for times when we are at war or depressions/recessions).

later,
epic

 

[Fred]

Its kinda funny how when we have a Republican president in congress, he does every good Democrat proud by spending to all hell.

We have a democratic in office (Clinton) he cuts spending like every good Republican wishes for.

Go figure!

 

[epicstruggle]

We have a democratic in office (Clinton) he cuts spending like every good Republican wishes for.

Actually if any credit is deserved, it should be given to the economy which was growing(bubbling) so fast that tax revenues were coming in faster than could be spent. Also, in having a republican congress kept clinton from spending as he wished. Remember that clinton's first 2 years(where dems held congress), he had proposed to spend through the roof. Thank god the reps stood up against it and then took over congress and kept him from going nuts. Problem is that the dems cant stand up against the reps, now.

later,
epic

 

[Natoma]

Wow someone has a horrible case of revisionist history syndrome there......

 

[Natoma]

Its kinda funny how when we have a Republican president in congress, he does every good Democrat proud by spending to all hell.

Not so. I'm a democrat, but I'm definitely a fiscal conservative. I don't have a problem with spending, as long as it doesn't create massive, out of control, deficits in the process, or require substantially higher and higher taxes to fund.

We have a democratic in office (Clinton) he cuts spending like every good Republican wishes for.

Go figure!

Clinton raised taxes and cut spending. Every last republican voted against that measure in 1993 because of the fact that it raised taxes on the upper income earners, while giving tax breaks to the middle class.

And speaking of clinton,

Former President Clinton slams tax cuts

 

[epicstruggle]

Wow someone has a horrible case of revisionist history syndrome there......

Where did i revise history?? Assuming your talking about my post.
-economy growing(bubbling) at an unbelieveable rate, bringing in tons of tax revenues
-clintons original 93/94 budget included national health care. Voted down by republicans
-republican take over congress in 94, keeping clinton from getting his own way in the budget for the most part. After that clinton couldnt do anything without comprimising with newt. Also welfare reform pushed through because of "contract with america" a republican promise in 94.

Please enlighten me as to my errors.

later,
epic

 

[DemoCoder]

The economy was already recovering in the late stages of Bush I's presidency. Bush I's raised taxes which closed off over half of Reagan's deficit. Clinton's tax increase closed off the other half. It was not what produced the surplus. What produced the surplus was the bubble economy, which tanked starting April 2000. Even California produced a massive surplus, which immediately disappeared in 2001. Hmm, wonder why? Massive tax-law changes? No, recession.

Oh, and let's not forget Gingrich's "Contract with America" which killed off many spending bills.


Clinton deserves credit for many things, he does not deserve credit for the boom/bubble economy. No politician does. Gates, Berners-Lee, Andreesen, Jim Clark, Bezos, Grove, Dell, Sanders, McNealy, Torvalds, etc deserve way more credit.

Yeah, I remember when I started my first company in '96, and got my first angel funding, I was sure I did it because of some new political policy changes, and my angel said he gave me money because Clinton raised taxes on him.

 

[Blade]

Big deficit = bad, but I read that it's a very attainable goal of theirs to half it within 4-5 years.

These things are long-term, like how it took Bush Sr. and Clinton all those years to get us back in the blue.

 

[Natoma]

Wow someone has a horrible case of revisionist history syndrome there......

Where did i revise history?? Assuming your talking about my post.
-economy growing(bubbling) at an unbelieveable rate, bringing in tons of tax revenues
-clintons original 93/94 budget included national health care. Voted down by republicans
-republican take over congress in 94, keeping clinton from getting his own way in the budget for the most part. After that clinton couldnt do anything without comprimising with newt. Also welfare reform pushed through because of "contract with america" a republican promise in 94.

Please enlighten me as to my errors.

later,
epic

Well for one thing, GDP didn't grow at an "unbelievable" rate until 1998 when it hit 4%. Until 1998, the economy was growing roughly 2%-3% a year. However significant deficit reduction began in 1993. The annual deficit quadrupled from $74 Billion in 1980 to $290 Billion in 1992 (12 years of Reagan - Bush I). From 1992 through 1997, the annual deficit decreased from $290 Billion to $22 Billion. It also happens to coincide with a marked decrease in government spending compared to the Reagan/Bush I era.

Government Revenues -- Government Spending
92% Growth -- 94% Growth (1980-1989)
77% Growth -- 36% Growth (1990-1999)
-12% Growth -- 21% Growth (2000-2003)

Tax revenues were growing very fast in the 1980s, but spending outpaced it, which throws a wrench into your idea that tax receipts were growing so fast in the 90s that we couldn't possibly spend it all. GDP growth didn't accelerate until roughly 1996-1997 (3.2%), then rose to 4% in 1998, and continued at that pace until 2001. So before 1996-1997, where did that $250 Billion decrease in the annual deficit come from if it wasn't necessarily coming from GDP growth? Spending reductions and tax increases. Again, Clinton's package in 1993, which raised taxes on the upper class, lowered taxes on business and the middle class, and reduced spending, was voted down by every republican in congress. The only reason it passed was because Al Gore had the deciding vote.

From 1992 - 1994, before the Republicans took office, government revenues increased 15% while government spending increased 6%. From 1994 - 1999 after the Republicans held the majority, government revenues increased 45% while government spending increased 16.4%. Hardly a panacaea argument that the Republicans "kept" clinton from getting his own way in the budget. Numbers courtesy of the CBO Archives.

The national healthcare plan you spoke of was proposed by Hillary, and was not part of Bill's official spending budget from what I recall. If you have any information to the contrary, I would be happy to read it.

As for Welfare Reform, well that was an instance where Clinton took a baby of the Republicans and made it his own. I'm not too up to date on the details of the bill, but again, if you have something I can read on this, please provide.

 

[Natoma]

The economy was already recovering in the late stages of Bush I's presidency. Bush I's raised taxes which closed off over half of Reagan's deficit. Clinton's tax increase closed off the other half.

Incorrect. The annual deficit at the end of Reagan's term was $155 Billion. At the end of Bush I's term, the annual deficit was $290 Billion. The deficit actually increased under Bush I, mostly because the rate of expenditure was greater than the rate of government revenue.

From 1980 - 1988, government revenue growth was 76%, while government spending growth was 80%. From 1988 - 1992, government revenue growth was 20%, while government spending growth was 30%. Not surprising that the annual deficit increased during his tenure. Unfortunately we're seeing an even worse situation under Bush II, with negative growth during the past 3 years, with a 26% growth in congressional spending, moreso when factoring in this year's additional spending proferred by Bush in his State of the Union, and now finalized in his 2005 Budget.

 

[Natoma]

Big deficit = bad, but I read that it's a very attainable goal of theirs to half it within 4-5 years.

Bush only wants to reduce non-defense discretionary spending. Unfortunately, non-defense discretionary spending only makes up 15% of the federal budget. The remainder is locked into mandatory expenditures such as SS and Medicare (66% of the federal budget), or defense (19%).

Current estimates show that limiting growth to 1% in non-defense discretionary spending would only save $3 Billion a year. That's rather paltry when you consider the fact that we've got $500 Billion in deficits at the moment. In order to bring our budget back in line, we either have to raise the taxes back to the levels they were pre-2001 Bush tax cut, or we have to take a serious axe to our military budget, which is current growing at an enormous annual rate, given our expenditures in Iraq, Afghanistan, and with Homeland Security, which is still badly underfunded. Or we have to take the always politically suicidal move to truly reform Medicare and SS and reduce the load on the federal budget. Unfortunately with the $400 Billion Prescription Drug Benefit that was just passed, revised to be $540 Billion now, I seriously do not see this occurring.

And I stand by my prediction that 10 years from now, that $3,300 gap in coverage is going to get closed because of immense political pressure that will come from 75 Million baby boomers who are nearing retirement in the next decade, and quadruple the price to around $2 Trillion. Maybe even moreso given the fact that everyone and their mother will begin purchasing prescription drugs for everything from Obesity to Sleep Disorders to Statins Acid Reflux to whatever you can name.

These things are long-term, like how it took Bush Sr. and Clinton all those years to get us back in the blue.

Don't you mean black?

 

[RussSchultz]

In order to bring our budget back in line, we either have to raise the taxes back to the levels they were pre-2001 Bush tax cut, or we have to take a serious axe to our military budget, which is current growing at an enormous annual rate

Or we need the economy to boom and fill the coffers using the tax rate we have now.

 

[Natoma]

In order to bring our budget back in line, we either have to raise the taxes back to the levels they were pre-2001 Bush tax cut, or we have to take a serious axe to our military budget, which is current growing at an enormous annual rate

Or we need the economy to boom and fill the coffers using the tax rate we have now.

Many supply side economists have long admitted that the rate of growth spurred by massive tax cuts is not enough over the long run to compensate for the decline in government revenue from those cuts. Even with the massive explosion in revenue and growth in the 80s, Reagan left office with a $150 Billion deficit. Bush I left office with a $290 Billion deficit. Clinton left office with a surplus.

Can you honestly argue that the boom in the 90s was that much higher as an annual GDP measure than the boom in the 80s that it would result in a $525 Billion reversal? I certainly can't. But I'd like to see you try.

 

[DemoCoder]

The economy was already recovering in the late stages of Bush I's presidency. Bush I's raised taxes which closed off over half of Reagan's deficit. Clinton's tax increase closed off the other half.

Incorrect. The annual deficit at the end of Reagan's term was $155 Billion. At the end of Bush I's term, the annual deficit was $290 Billion. The deficit actually increased under Bush I, mostly because the rate of expenditure was greater than the rate of government revenue.

No, you're wrong. Most blame falls on the revenue reductions, the spending did not rise significantly (6-7% per year historical average) . Bush Sr inherited a structural deficit. CBO data shows that discretionary Bush Sr spending went down. It's non-discretary social security/medicare/etc which continue to heat up the deficit went the economy falters (per CBO's own economy outlook) Your own figures disprove you. Reagan's spending growth was 80%, Bush Sr's was 30%. The major change was revenues, 76% to 20%, which as well all know, the economy can change much quicker than government employees and programs can be fired and canceled. With the recession eating into revenues, and the government slow to react (or unwilling, to further lower demand and hurt the economy further), the deficit goes up.

Is it your contention that Bush Sr was a spending maniac and that was the cause of the deficit? Is it that government should be able to instantaneously react to the economy and "manage it" and "control it"?

So it is correct to say that Bush Sr's deficit was inherited from Reagan, because the Reagan administration put programs into place whose costs have to be paid by future presidents. If we have a double-dip recession, and the California budget deficit continues to balloon, even if Arnold takes a buzzsaw to the budget, is he to blame for the deficit increase because he didn't reduce spending enough?

Bush Sr increased taxes in 1990 that amounted to $138 billion (predicted) revenues between 1990 and 1995. The actual amount was far higher due to economy recovery that began in 1991. Clinton's increase was about $240 billion over 5 years between 1993 and 1995. It turned out to be alot more because of the ongoing recovery.

Unfortunately we're seeing an even worse situation under Bush II, with negative growth during the past 3 years, with a 26% growth in congressional spending, moreso when factoring in this year's additional spending proferred by Bush in his State of the Union, and now finalized in his 2005 Budget.

No, there is a big difference between Bush Sr and Bush Jr. Bush Sr did not increase spending, in fact, his spending levels went way down compared to Reagan. He even got other nations to pay for our Iraq war. And he increased government taxes $25 billion per year. ( I just looked at the CBO data, and military went down under Bush Sr as % of budget in constant dollars. )

Bush Jr *massively* increased spending on all fronts, both military and social. Meanwhile, he also massively cut taxes. In 1983, Dole rescinded many of Reagan's '81 tax cuts, and Reagan himself in 1986 raised taxes.

In no way can Bush Jr be compared to Bush Sr, or even Reagan, in terms of spending responsibility.

However, I do find your attempt to place 100% of blame on republicans, and 100% of credit on Democrats to be as absurd as Republicans claiming 100% of credit for ending the cold war, or the growth of the 80s. You are a political animal Natoma, interesting only in scoring points for your tribe or pack, not an independent.

Our government consists of an executive and legislative branch (over 500+ people). All of these people have vested interests of their own. In no way can all budgetary decisions be boiled down to a single party or even a single man. Maybe if things were heavily "skewed" like in Japan, but we have a gridlocked government, and Democrats or Republicans can stop or table any bill if they want to, Senate majority or not. The tighter the gridlock, the more power individual politician's votes have, which increases the payola they can extract for complicity votes.

Between 1992 and 2000, our government was run by democrats and republicans, not Bill Clinton and democrats only.

 

[Natoma]

Regarding the first half of your post:

Incorrect. The annual deficit at the end of Reagan's term was $155 Billion. At the end of Bush I's term, the annual deficit was $290 Billion. The deficit actually increased under Bush I, mostly because the rate of expenditure was greater than the rate of government revenue.

From 1980 - 1988, government revenue growth was 76%, while government spending growth was 80%. From 1988 - 1992, government revenue growth was 20%, while government spending growth was 30%. Not surprising that the annual deficit increased during his tenure.

If you took away from what I bolded that I implied that Bush was a spending maniac, then you misunderstand. Government revenue was 20% from 1988-1992, that much is fact. Government spending growth was 30% during that same time. What was the point of my statement? That the deficit grew mostly because the rate of expenditure was greater than the rate of government revenue. That is not meant to imply that Bush spent himself into oblivion at all.

You stated that Bush I closed off half Reagan's deficit and Clinton closed off the other half, and I disputed that because the figures show the deficit increased during Bush I's term, not decreased. That was the sole point of my statement, and nothing more.

And for the second portion of your post, again you misunderstand. There was no attempt on my part to compare the fiscal actions between Bush I and Bush II, which you stated, and I agree with, are vastly different. I was comparing the actual economic performance figures, not the policy itself. If you read that from my post, then you are mistaken and I hope this clears that up.

I have nowhere placed 100% of the blame on Republicans and 100% of the credit on Democrats. Epicstruggle made a comment regarding the growth in the 90s that it was due to the republican majority in congress holding Clinton in check, and I showed figures from the CBO that refute those claims, as well as the figures that show the Republicans are not the fiscal conservatives they make themselves out to be.

I am a fiscal conservative. But my brand of fiscal conservatism deals with budget pragmatism and balance. It is the same fashion with which I deal with my household budget. I am socially progressive/liberal/whatever you wish to call it. If fiscal conservatism/social progressiveness fashions me a democrat then so be it. But in no way shape or form am I placing all the blame or all the credit to any one particular person or party. However, I do give credit to particular policies. If those policies are enacted by a Republican, then good for him/her. If those policies are enacted by a Democrat, then good for him/her. But I'll tell you this much. If the dems win the White House back and go roughshod over the budget the same way Bush has done over the last 3-4 years, I'll be bitching up a storm about it just as hard, in the same way that fiscally conservative Republicans are breaking ranks and attacking Bush today for his reckless economic policies, along with the Democrats.

 

[DemoCoder]

Well, my only point Natoma was that Bush I's increase in 1990 (I will revise my figures here) made up 1/3 of the increased yearly revenues. Bush Sr increased revenues in 1990 by $25 billion per year. Clinton's 1993 increase was $50 billion per year. Together, they total $75 billion per year. Thus, atleast 1/3 of the revenue benefit that Clinton got in 1992-1995 was from revenues of Bush Sr's tax increase. I initially, from memory, remembered 1/2, but it's 1/3.

My other point is that government economic policy often has no affect until years later. Structural changes in the economy are slow and take a long time to build up, but when they do, they often result in exponential returns.

Let's say that Kerry becomes president and goes all out on Science and Research spending, say, for Biotech and Nanotech. Then, after an 8-year run, a Republican wins. In the year 2012, the beginning of the next Big Boom happens, only this time, it's bio/nanotech, and we have 8 years of Clintonian-esque growth, before a bubble bursts. The republicans claim credit, but they rode at the "top" of the hockey-stick exponential curve. It turns out, that eight years of intense biotech initiatives structually altered the economy to make it more favorable to that sector, and the fruits of this didn't come until after Kerry's presidency.

Clinton deserves partial credit for balancing the budget. He just didn't do it all by himself. All I'm saying is, part credit goes to Bush Sr, and part credit goes to luck -- being in office during the internet boom.

(BTW, Reagan deserves credit for lowing cap gains and IMHO, absurd 70%+ marginal rates, and presided over a term where a lot of painful structure changes and displacements were made that set the stage for boom in the 90s)

 

[RussSchultz]

I always thought the surplus was a bit of funny money, anyways, as they included the tobacco settlements into the general fund.