In the last year or so, we’ve seen some relatively large federal assistance provided to a few fairly large private industries. Last year, it was the $15 billion grant and loan package to “bailout” the airline industry after the September 11 attacks. At the time, it was seen as the prudent thing to do, since the federal government had grounded all flights for days until it could return some sense of security to the skies. White House Press Secretary Ari Fleischer explained that the assistance was necessary because "a safe, viable and effective commercial air travel system is important to America’s economy and to our way of life."

With the shake-up in the Administration’s economic team, the recent rise in the unemployment rate to 6% (the highest rate in eight years), and absolutely no evidence that the massive Bush tax cut has done anything but send the federal budget on a rapid spiral into deficit, a reasonable person might think that it was time for the Administration to reevaluate the idea that tax cuts are the solution to everything. The President’s economic stimulus plan, currently in the design phase, however, is expected to consist of tax cuts aimed at corporations and individuals in the higher tax brackets.

Congress officially adjourned last Friday, after passing its seventh Continuing Resolution (CR) of the year. This CR, H.J. 124, was necessary to provide the funding to keep government running because Congress was unable to pass 11 of the 13 appropriations bills for FY 2003, which began on October 1, 2002. This CR funds departments and programs at their FY 2002 levels through January 11. It appears there will be an effort to pass the FY 2003 appropriations before the President’s State of the Union address, so at least one more CR will be necessary.

On Friday, October 25, Treasury Secretary Paul O’Neill and Office of Management and Budget (OMB) Director Mitchell Daniels released the Treasury Department’s summary of the budget results for fiscal year 2002, which ended September 30. According to this report, FY 2002 closed with a $159 billion deficit -- $2 billion larger than the $157 billion the Congressional Budget Office (CBO) predicted in its Monthly Review earlier this month.