Accessibility links

Breaking News

Lawmakers Debate 2.5 Trillion Dollar Federal Budget - 2004-03-09


Every year, the President announces his proposed budget for next fiscal year, which runs from October through September. President Bush's 2005 budget -- which would spend nearly two-and-a-half trillion dollars -- already has drawn criticism from the opposition Democrats and members of his own Republican Party. In this report prepared by Rich Kelley, VOA's Brent Hurd examines the debate over the US budget.

Widespread criticism of a president's budget often is the norm here in Washington -- regardless who the President is, or which political party he belongs to. In fact, a constant theme of Washington politics is the predictability of the attacks on the annual budget proposal. This year, for example, President Bush's offering was only a few hours old when Kent Conrad, the senior Democrat on the Senate Budget Committee, called it "deceitful." “You look at what he has said every year. He has been wrong by a country-mile (a very large margin). Now he tells us, 'Oh, let's focus on just one part of the budget (homeland security).' That's gamesmanship. That's not being straight with the American people."

Senator Conrad's charge that budget numbers keep changing is not unusual. The federal budget process is extremely complex and evolves as the world changes.

Lawmakers who focus on domestic issues, such as helping the poor, often say the budget neglects social needs. Other politicians claim taxes are too high and government spending should be cut. Another budget argument often heard in Washington involves foreign policy. Some representatives and senators argue that America needs to devote resources abroad, such as in the reconstruction of Iraq. Others contend the United States should fix its problems at home before tackling those in other countries. How tax dollars are spent reflects the nation's priorities.

Strobe Talbot is president of the public policy research organization, The Brookings Institution, here in Washington. “There are few issues more crucial to the future of this country -- and I would say that have as much of an implication for American's leadership in the rest of the world -- as the US government's fiscal policy."

About two-thirds of the proposed 2005 federal budget has already been promised to senior citizens and disabled people who receive monthly government pensions and subsidized medical care. The pension program is called Social Security. And this entitlement program is considered by politicians to be virtually untouchable due to the political clout of elderly voters. So the debate over spending typically concerns the portion of the budget not earmarked for Social Security.

Joshua Bolton is director of the Office of Management and Budget, which helps the president prepare the federal budget. He told Congress recently how President Bush plans to spend the "discretionary" -- non-Social Security -- portion of the budget. “The president's 2005 budget continues to support and advance three overriding goals and priorities: winning the war on terror, protecting the homeland and strengthening the economy. The president is committed to spending what is necessary to provide for our security while restraining spending elsewhere. Since September 11, 2001, more than three-quarters of the increases in discretionary spending has been directly related to or in response to the terrorist attacks -- to enhance homeland security and the war on terror."

Mr. Bolton says the president is adamant about providing enough to protect the United States while cutting spending elsewhere. “The president's 2005 budget continues this spending trend: significant increases for the essential elements of our security programs combined with a dramatic reduction in the growth of discretionary spending unrelated to security. With Congress' help, we will be well on the path to cutting the deficit in half in five years."

But President Bush's critics in the Democratic Party attack the proposed budget on several fronts. Kwame Kilpatrick is mayor of Detroit, Michigan, one of America's largest cities. He argues that the federal government should spend tax dollars here in the United States -- before sending money abroad. “This country’s economy is driven by its 320 metropolitan areas, which generate 85% of our nation's economic output,” he says. “And the nation's long-term success hinges on strengthening and creating high-paying jobs in these economic centers. This can happen quickly and dramatically with investment in urban infrastructure. The President has stood up and shown his commitment to rebuild Iraq by asking for another $20 billion for the country's reconstruction. Now he must make the same commitment to our nation's cities."

The president's 2005 budget proposal calls for 500 billion dollars more in spending than the federal government collects in taxes. Democratic Senator Kent Conrad warns that the deficit will continue to grow and reach astronomical proportions. "The hard truth is this president is running us right over the fiscal cliff. And it's not just the next five years. The really jarring thing is where his plan takes us after the next five years because as the baby boomers start to retire and the costs of his tax cuts explode, the deficits are going to go into hyperspace. The president says he wants to go to Mars -- he's taking deficits to the moon."

The federal deficit also is causing concern among fiscal conservatives in the president's own party. However, many of these Republicans do not want to increase taxes to close the deficit. Instead, they are calling for even more tax cuts than those proposed by the President. They and many economists argue that government borrowing and budget deficits will be offset by tax cuts that will stimulate business development, broaden the tax base and ultimately increase federal revenues.

But Brian Reidl, who studies the federal budget at the Heritage Foundation in Washington, warns that President Bush may face Republican opposition. “Up until now, the viewpoint was that the deficit was the result of the war on terror and the recession,” he says. “It was a temporary problem and as soon as September 11th and the recession moved further into the rear-view mirror, we would get back into balance. Well, now that spending has gone up for years and the budget deficit has not gone away, fiscal conservatives in Congress are getting frustrated. This year you could see a contentious debate in Congress."

US Treasury Secretary John Snow notes that America faced significant increases in government spending last year to fight the war on terrorism. But he told the Senate Budget Committee recently that last year's tax cut was a principal reason for this year's economic upturn. “When I talk to business people from other parts the world, they're astonished that the American economy has sustained itself as well as it has through this period,” he says. “And I think that's of complement to the resourcefulness of the American people and to the adaptability of our institutions, including the Congress, which responded with the tax bill last year. Without the tax bill last year, the economy would not be where it is today."

Vigorous public debate over the federal budget is as old as the United States itself. The US Constitution gives Congress the power to levy taxes and pass laws directing how tax money is spent. But the Constitution makes the president the chief executive of the federal government. He is authorized to spend the money, but only if Congress appropriates it.

The 2005 budget is expected to come to a vote in October of this year. In November, the President and most members of Congress stand for reelection. And partisan wrangling over the budget is all but certain to intensify as the election draws near.