Putting Politics First And Numbers Second

By Stanley Collender

Published February 06, 2004, issue of February 06, 2004.
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The president’s budget is both a political statement and an accounting document. It sets out the White House’s priorities and agenda and tells us what they will cost.

Unfortunately, while the Bush 2005 budget sent to Congress this week fully succeeds at telling us where the president wants to go, it fails just as completely at providing a bottom line that is credible. Indeed, the numbers are so unreliable that in just the few days since the budget was released it has created serious doubts about whether we can afford the policies the administration is supporting.

The politics of the Bush budget are actually quite simple: In this election year the president is playing directly and specifically to his base of supporters who want to see military spending increased, taxes cut and domestic spending limited.

On the one hand, this is a bit surprising. The president would seem to be so popular with his core supporters that he might want to use what likely will be one of the biggest legislative events this year to add spending or tax breaks for those who might not otherwise support him next November.

But on the other hand, it makes great political sense. The Republican base the White House is trying to reassure is the same group that abandoned Republican candidates in 1996 because they were angry at the Gingrich-led Congress for spending so much. These voters did not switch their allegiance to Democrats; they just didn’t show up at the polls. And, as the presidential vote in Florida in 2000 amply proves, a handful of votes could be the difference between who sits in the White House for the next four years.

The Bush administration is using this budget to play directly to the president’s political strength in another way. The largest proposed increases in spending are for the Pentagon and homeland security, the two areas where opinion polls show the president with the biggest lead over any potential challenger.

But when it comes to the dollars, much of the president’s budget just doesn’t add up.

For example, the budget says that the deficit will be $364 billion in 2005. But, as the White House admitted at literally the same time it sent the document to Capitol Hill, that already astoundingly high deficit estimate doesn’t include the $50 billion it supposedly will cost in 2005 for a continuing U.S. military presence in Iraq.

The administration is going to request the money later — after the election — and intentionally left it out of its budget for fear that the deficit would look too large, be too politically unacceptable, and focus too much attention on the economy, an issue where the president doesn’t get as high marks.

The president’s budget also includes a variety of spending reductions that even the Republican-controlled Congress is almost certainly going to reject. For example, the budget wants spending for highways to be $100 billion less than what the House and Senate seem likely to approve. It also includes a tax provision that would increase revenues by billions of dollars each of the next few years but which the White House itself says the president won’t push.

These are just some of the reasons that the president’s pledge to cut the deficit in half by 2009 is hard to believe. In fact, the White House has to resort to some considerable fancy fiscal footwork to make its numbers work, including relying on the Social Security trust fund surplus for a substantial part of the improvement in the budget outlook.

The president’s numbers problems are already creating considerable havoc in Washington, and that, in turn, could easily and quickly eliminate some of the political advantages his budget was designed to yield.

About 30 of the most fiscally conservative Republicans in the House of Representatives have told the White House that they will not support the president’s proposal to increase spending on space exploration, and that has forced the administration to back down from its already-announced program to send men and women to Mars.

These are the same House members who were so angry last November about the president’s support for the Medicare prescription drug bill that they came close to causing its defeat. They are now furious about the White House revising its cost estimate for this program upward by more than $100 billion over 10 years just weeks after the legislation was signed into law.

The deficit that so far has not been much of an issue during this administration suddenly has become very salient, in large part because the president’s budget includes a new record-high half-trillion dollar deficit for 2004.

In addition, the skepticism about the White House’s actual ability to cut the deficit in half over the next few years has created new concern on Wall Street about Washington’s borrowing needs and in so doing has increased the possibility of interest rates rising just before the election.

In other words, at the precise time that the White House would prefer to have everyone focused on what the administration is doing to make the world safer and the United States more secure, Congress and the president could be locked in a difficult struggle over spending and taxes, mortgage and credit card rates could be increasing, and concern about the economy could be growing.

And that would be a very different political statement from the one the president was hoping to make when his budget was released.

Stanley Collender writes the weekly “Budget Battles” column for NationalJournal.com and GovExec.com.

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