Fraters Libertas

Let's Make A Deal

With the release last week of the latest cost estimate for the post war reconstruction in Iraq and Afghanistan, critics of the Bush administration have jumped all over the President for his budgetary policies. Regrettably, in this case at least, they have a point. Bush is attempting to pursue three expensive objectives in the midst of a soft economy and as a result his budget is beginning to look like Elvis in 1977. Bloated and headed for disaster.

Spending on the military and homeland security is obviously a priority given the on going war on terror and it has increased significantly since 9/11. In order to spark the economy, the President has also pushed various tax cuts through Congress in the last few years. Finally federal spending on areas outside of defense and homeland security has also increased under Bush. These three factors, combined with the sluggish economy have resulted in record deficits (at least in terms of raw dollars) that are only projected to get worse in the decade ahead.

During the 80's Ronald Reagan increased military spending in order to win the Cold War and cut taxes to help the economy at the same time. But he also cut the non-defense related portion of the budget. Even so his actions lead to large deficits. In time revenues increased as the economy boomed, thanks in part to the tax cuts. The deficits became smaller and smaller.

In the 90's we actually saw a budget surplus thanks mostly to a strong economy, reduced defense spending as a result of the end of the Cold War, and a Congress that exercised at least a modicum of spending restraint. It was Clinton's surplus because he was in office at the time but it was Reagan who laid the foundation, without which it would never have occurred.

With the situation that exists in the nation today there is no way that President Bush can continue to:

a) fund the war on terror
b) cut taxes
c) increase non-defense spending

You can certainly do one of the three. You can maybe even do two. But you cannot possibly hope to continue to pursue all three. Something has to give.

And plenty of liberals know just what that should something should be. Yesterday an editorial in the Minneapolis Star Tribune called on the President to not make permanent the temporary tax cuts previously passed:

The obvious answer is that Bush should withdraw his proposal for permanent extensions of the various temporary tax cuts that he has sent to Congress these last three years.

In Washington there is much debate about why the government has plunged back into deficit spending after four years of surpluses starting in the late 1990's. Any honest answer is that recession, war and tax cuts each made some contribution.

Only one of those contributors is controllable, the tax cuts. One thing is plain from the latest projections of the Congressional Budget Office, a nonpartisan and trusted scorekeeper. If the temporary tax cuts expire as scheduled, starting in 2006, the nation will move back toward balanced budgets by the end of this decade. If the tax cuts become permanent, they will cost the Treasury more than $100 billion annually by mid-decade, doom the government to essentially permanent deficits and impose a huge debt on the next generation of taxpayers.

It's actually a sign of progress that the Strib editorial board now acknowledges the war on terror and the struggling economy as contributing factors to the deficits. Until recently they liked to lay the blame on the Bush "tax cuts for the rich". However, they do fail to mention that the increased levels of non-defense spending have also played a role.

It's also encouraging to note that they recognize that spending to fight terrorism and win the war is not optional. They are asking us to make sacrifices to support the war effort and tax cuts are the first thing they want tossed on the pyre.

And I agree. There is nothing more critical to the future of our country than our success in the war on terror. Nothing. And I'm willing to give up "my" tax cuts to do it. (While recognizing of course the negative impact this would have on the economy.)

However, I think it's only fair that the burden be shared. Therefore I propose that in addition to shelving the tax cuts we also cut non-defense/homeland security related spending. By the same amount (dollar for dollar) that the tax cuts would have been worth had they been made permanent. Sounds like that would be about a hundred billion by 2005 if the Strib stats are correct.

After all we're all in this together and we all need to make sacrifices. Right?