A Different Path on the Budget

A Different Path on the Budget

Five years ago, when President Bush submitted his first budget, I wrote a column that began: "We are fortunate, after years of budget deficits, to finally enjoy a projected budget surplus, a real surplus separate and apart from the Social Security surplus. While this new ‘on budget' surplus provides us with innumerable possibilities, it also requires us to balance how best to use our resources within a framework of fiscal responsibility. If we choose the wrong path we could return to the days of big federal deficits and all the damage they did to our economy."

Today, it is overwhelmingly clear that the President and Congress took the wrong path. The projected surpluses in 2001 would have eliminated our national debt entirely in ten years. Instead, the President's new budget projects a debt of $11.5 trillion in five years - a dramatic reversal and an enormous burden to pass on to our children and grandchildren. Where did the money go? An overwhelming amount went to pay for tax cuts for the wealthiest Americans. For example, the top 1 percent of households, whose incomes average nearly $1.2 million each year, received an average of $35,000 in 2004 from the Bush tax cuts.

And not only was there a huge loss of revenue during these years, but America failed to make the necessary investments in our future. Imagine how different Michigan and the nation could be today if we had made a bold investment in 2001 in manufacturing and advanced automobile technology, and had fully funded the No Child Left Behind Act.

Instead of changing course, however, the President last week sent Congress a budget for the year that continues down the same unfortunate path. Under the President's plan, our current $8 trillion debt would grow to $11.5 trillion in the next five years, primarily because of more tax cuts mainly for the wealthiest among us. And as bad as those numbers are, they do not tell the whole story. The President does not include the costs of the ongoing war in Iraq or the reforms we know are needed to make sure that middle class families aren't caught by the Alternative Minimum Tax. Fixing the AMT alone, which both parties agree we must do, will cost $1 trillion over 10 years.

Although the cost of the President's tax breaks are as large as the entire budgets of the Departments of Agriculture, Labor, Education, Veterans Affairs, Transportation, Justice, Interior, Energy, State, HUD, and EPA combined, he still wants to make cuts that will be painful for critical programs but insufficient to seriously address the deficits his tax breaks create.

For example, even though we have lost 2.8 million manufacturing jobs on his watch, the President proposes a massive cut in the successful Manufacturing Extension Partnership Program and to eliminate the Advanced Technology Partnership Program completely. The President's budget would cut funding for cancer research, a disastrous strategic error as we approach cures for some of the most dreaded diseases. The budget includes the largest cut to federal education funding in the 26-year history of the Department of Education, including woefully underfunding No Child Left Behind.

For the fifth year in a row, although college tuition costs are rapidly rising, the Bush budget does not increase the maximum Pell Grant amount for low-income students seeking a college education. In 1975, the Pell Grant covered 80 percent of the cost of a four-year public college education; today, that number is about 40 percent. And despite the ambitious goal the President outlined in his State of the Union address of cutting Middle East oil imports by 75 percent within 20 years, his budget calls for an 18 percent cut in programs aimed at reducing energy consumption.

Also in his State of the Union address, the President called for a bipartisan commission to look at the challenges facing Social Security. Yet he still included his misguided plan to privatize Social Security in his budget. Implementing the President's proposal for private accounts in Social Security would add $712 billion to the deficit over ten years, and that cost would grow substantially larger over time. Shamefully, the Bush budget would also eliminate the $255 death benefit provided by Social Security to the families of those who have passed away. While modest, this benefit is important to many families who need assistance to bury their loved ones with dignity.

We cannot go back to 2001, but we can start making better choices today than we have for the past five years. Sadly, the President's budget proposal would continue to take us down the wrong path. We need a dramatic break from those failed policies - including passing up irresponsible tax cuts and making important investments in America's future - to put our country back on track and begin the long process of climbing out of this deficit ditch.

http://levin.senate.gov/newsroom/release.cfm?id=251729