Among other "losers" in FY2006 Budget, are child survival and disease programs; American Indian education and health service; federal prison system; migration and refugee assistance; office of violence against women; the Peace Corps; lead-hazard reduction; housing opportunities for persons with AIDS; and federal drug control programs
Both candidates have budget ax poised
Copyright © 2004 Nando Media
Copyright © 2004 Christian Science Monitor Service
By DAVID R. FRANCIS, The Christian Science Monitor
(September 12, 2:14 pm ADT) - There's one national issue that neither presidential candidate wants to talk about in the campaign, but probably will carry out in office: budget cuts.
Indeed, the Bush administration - very quietly - has already put federal agencies on notice that most discretionary programs will go on the chopping block, starting in fiscal 2006, according to leaked documents.
You can thank the ballooning federal deficit. With both candidates promising to halve the federal deficit - in four years (Kerry) or five years (Bush) - austerity will probably be the order of the day no matter who wins.
The biggest cuts will come from the 19 percent of federal outlays that fund some of the most popular programs.
"It's really quite a squeeze," says George Krumbhaar, senior editor of USBudget.com, a commercial service that monitors budget developments.
"War expenditures continue to crowd out government aid to the state and local governments, the poor, the sick, the unemployed, the homeless, the environment, the arts, the schools, the hospitals, the huge numbers of families without medical coverage, and all the children still left way behind," adds Robert Parks, a finance professor at Pace University, New York.
Although President Bush is highlighting an activist, compassionate domestic agenda, such promises will be hard to keep, says Richard Kogan of the Center on Budget and Policy Priorities, a liberal Washington think tank. Even education spending, which has nearly doubled since Bush came to office, faces trims.
The White House is not eager to publicize such moves. For decades, the publicly available database of the federal budget has projected spending estimates for various departments and programs four years into the future.
This winter, breaking long precedent, data for the four years beyond fiscal 2005, the year that starts Oct. 1, wasn't published.
Some experts suspect that the White House didn't want such stern news publicized. But the 1,000-page computer run was given to congressional staff. It was leaked to Kogan and from him to Krumbhaar, who recently published an analysis of the numbers.
Also revealed was the "spring guidance" that the Office of Management and Budget gave to federal agencies. OMB told them to stick to the fiscal 2006 spending numbers in preparing their budgets. If an agency objected, any spending increase in one area would need to be offset by decreases in other spending by that agency.
That will be tough in many cases. The Department of Veterans Affairs, for instance, was told to cut its spending in fiscal 2006 by $726 million from its fiscal 2005 level of $29.5 billion.
Among other "losers" in 2006, Krumbhaar lists child survival and disease programs; American Indian education and health service; federal prison system; migration and refugee assistance; office of violence against women; the Peace Corps; lead-hazard reduction; housing opportunities for persons with AIDS; and federal drug control programs.
Altogether, 476 programs face cuts if the 2006 budget estimates are adjusted for inflation, 56 are frozen, and 61 get spending hikes. Looking at unadjusted dollars, 329 get cuts, or about half of the total. That compares with about 20 to 30 percent of agencies that have faced cuts between 1999 and 2005, Krumbhaar notes.
Drafting of the 2006 budget will get serious later this year and it will be made public in February 2005, after the election. It promises to be an impressive fight because large parts of the budget, effectively off limits to the deficit-cutters, are growing.
For example: Last week's estimates by the Congressional Budget Office put gross interest on the national debt at $691 billion in 2014, up from $322 billion this year. These payments on debt are mandatory. That increase reflects growth in gross public debt from $7.4 trillion this year to $13.3 trillion in 2014. In the same period, spending on Social Security and Medicare will soar.
Some conservatives welcome the pressure put on discretionary spending.
"There will be more restraint in the next few years than in the last few years," says Chris Edwards, an economist at the Cato Institute, a libertarian think tank in Washington seeking smaller government. He hopes deficit pressure will force the administration and Congress to attempt to eliminate "waste, fraud, and abuse."
Edwards urges reducing $300 billion from $2.3 trillion in federal outlays - including cutting defense, abolishing the Education Department, and privatizing the postal service, Amtrak, and the National Aeronautics and Space Administration.
But deficits don't always lead to cuts.
"It's not clear as a practical matter that deficits have much impact on spending," says Charles Davenport, a law professor at Rutgers University, Newark. Under Bush, federal spending has grown decidedly; he has never vetoed a spending bill; and the White House tends to put a spin on deficits as "good" to boost the economy.
Senator Kerry proposes repealing the Bush tax cuts for those making $200,000 a year or more. But his spending proposals, including more health coverage, will at least use up extra revenues from that plan.
"There is no discipline on this deficit issue," says Professor Davenport. When Bush says tax cuts will give you your money back, what he really means is your grandchildren's money - because they will have to deal with the federal debts.
