The problem with the budget proposed to the Congress last week by President Bush is that it is based on counterintuitive logic. If it were approved as it stands, the government would spend more than ever, but collect less in taxes to cover those increased expenditures, causing the national debt to soar even higher.
The emphasis on defense, as opposed to domestic needs, will be justified by the war on terrorism, but the question that needs to be asked is whether the American people want their government to lean that far forward in military involvement across the globe.
Apart from the buildup of now more than 100,000 troops in the countries around Iraq -- Kuwait, Saudi Arabia, Djibouti, Qatar, Oman and Bahrain -- and the 12,000 in Afghanistan and surrounding countries, there are also significant numbers of American forces deployed in Colombia, the Philippines, Georgia, Bosnia-Herzegovina, Kosovo and Macedonia, as well as thousands at long-standing bases in Germany, Japan, South Korea and Iceland.
The proposal for fiscal year 2004, which begins Oct. 1, 2003, includes spending of $2.23 trillion and income of $1.92 trillion, a shortfall of $310 billion. That deficit would be the biggest ever in American history, surpassing the then-record $290 billion deficit of 1992, the last year of Mr. Bush's father's administration. Goodbye to the estimates of just a few years ago about retiring national debt with budgetary surpluses. If the administration's spending plan is approved the debt will approach $7 trillion.
Spending overall would go up $28 billion, of which $16.8 billion, 60 percent, would be on defense. Those are fixed costs and do not include the estimated $100 billion that a war with Iraq would cost. To reduce the red ink just a bit, there would be cuts in such modest domestic programs as vocational training, after-school services, rural development, funds to put new police officers on the street and public housing.
Other domestic expenses, such as Amtrak, would be shifted from the federal government to the states. We note that many of the states, including Pennsylvania, are strapped, facing the same gap between even straight-line financing of programs and falling tax revenues. Oregon's state government, for example, asked for a tax increase in a referendum to bridge its shortfall. The voters refused and the state is now cutting programs.
Complicating the fiscal problem are revenue reductions. In addition to the $1.35 trillion tax cut passed in 2001, Mr. Bush's new budget proposal calls for an additional $1.5 trillion tax cut over the next 10 years, at the same time that multibillion-dollar deficits are projected for every year of the decade.
The good news is that Congress will have the opportunity to examine, discuss and modify the administration's new budget proposal. Even some of Mr. Bush's fellow Republicans are likely to balk at this unbalanced budget.
The Democratic leadership in Congress has called the proposed 2003 budget "an epic disaster." Temporary deficit spending can provide salutary stimulus to a lagging economy. At the same time, if we ran our households on the basis of spending $1.16 for every $1 we earned, the results would be not only worrisome in the short run but also catastrophic over the long haul. It will be up to Congress to rescue the nation from a similar fate.
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