A Non-Businesslike Budget
The federal budget deficit is projected to soar to an all-time high of $423 billion by the end of this fiscal year, the White House recently announced.
You couldnt run your business that way, of course, but its different when the business you run is in the business of printing money. That still doesnt make it right.
By squandering budget surpluses President Bush inherited, he has turned lemonade into a lemon. He took a budget that had a $236 billion surplus the year before he took office and plunged it year after year deeper and deeper into a sea of red ink.
Huge deficits “ the amount our children and grandchildren will be charged tomorrow to finance the lack of fiscal discipline today “ are likely for years to come.
Federal spending once again will exceed revenue in the $2.7 trillion budget that Bush recently proposed for the next fiscal year that starts October 1.
The size of next years deficit will be even greater than the White House calculated for two main reasons; low-ball expenditure projections and exaggerated savings. First, the presidents budget isnt straightforward about costs we are sure to incur. Second, he called for eliminating or cutting popular programs that he knows even his fellow Republicans on Capitol Hill wont touch, especially in an election year.
The cost of the wars in Iraq and Afghanistan are an example of how the Bush budget understates real-world expenses. He asked Congress to budget $50 billion for operations in Iraq and Afghanistan in 2007. The actual cost of those conflicts will be much greater. We know that in 2005 the U.S. spent more than $105 billion waging the two wars. The administration already has signaled that it will ask for an additional $70 billion on top of $50 billion already appropriated for the two conflicts this year. Do the math. Clearly, the president is understating the deficit in his 2007 budget “ by about $70 billion -- by asking us to believe that Iraq and Afghanistan next year will cost less than half of what the conflicts cost in 2006 and 2005.
Then there are the unrealistic savings in his budget. He proposed eliminating or cutting programs that he knows Congress wont abolish or severely cut. They include education, local law enforcement, housing, transportation, pension security, and health care for senior citizens, veterans, the disabled and the poor.
Moreover, instead of restoring common-sense fiscal policies that gave us balanced budgets in the not-so-distant past, the latest Bush budget advocates revenue policies that would blow a $1.7 trillion hole in federal budgets over the next decade.
We can do better. We can run the government the way successful businesses in the San Fernando Valley and across the country manage their finances by prudently investing in the future while living within our means.