Click here to see comments made and questions answered by Senator Judd Gregg (R-NH) regarding the President's FY 06 budget. Gregg is chairman of the Senate Budget Committee. In this particular news conference, Gregg discussed the President's attempt to "discipline the fiscal house of the federal government," and defended some of the President's budget proposals to cut spending in order to reduce the deficit. What Gregg fails to mention is that Bush's tax legislation since 2001 is responsible for 48 percent of our current deficit, yet Bush's proposal for how to deal with the deficit is coming in the form of major cuts to non-defense domestic programs. This discipline will hurt public schools, people on food stamps, National Parks, and affect scores of other programs. True fiscal discipline by Bush would involve more responsible tax policies, because right now Bush is proposing that our current deficit be paid for by people who cannot afford it, all while giving massive tax breaks to very wealthy people.

The President's Budget was released today, and is largely being touted as the toughest budget this administration has ever put together. The roughly $2.5 trillion budget is expected to either reduce or eliminate more than 150 federal programs. It also holds the growth of discretionary spending below levels of inflation. While Vice President Cheney has said the cuts in federal programs "are not something we've done with a meat ax, nor are we suddenly turning our backs on the most needy people in society," the reality is that the number of people living in poverty has increased since 2000, and this budget serves to further cut many programs in need of extra funding, not cuts. An editorial in today's Washington Post calls the budget a "measure of national character." In many ways this is true -- the budget reflects which priorities the administration feels need further attention, and which are unimportant enough to let fall by the wayside. In this budget, many vital social programs are left behind, although the President's budget outlines a 4.8 percent increase in defense spending. See this article for more details. This budget release comes at a time when the fiscal health of the nation is struggling. The President's budget, as Cheney says, reflects a "fair, reasonable, responsible, serious piece of effort" on their part to reduce the deficit. Last week the Congressional Budget Office released record-high deficit projections for FY2005, and the administration's "tough budget" is partly in response to this. While keeping this in mind though, it is important to remember that one of the main reason's for this deficit has been Bush's first term tax cuts, which have drained what would have otherwise been available national revenue. Tax cuts, in fact, have played a much larger role in fueling the deficit than discretionary spending has, according to this report from the Center on Budget and Policy Priorities. So, while the President's tough budget can be viewed as a response to what is undoubtedly a dire fiscal situation, we must keep in mind that their actions are anything but reasonable and responsible; in fact their actions punish programs that serve low-income people disproportionately to the level at which these programs truly put a strain on our national budget. The fiscal situation we find ourselves in today is overwhelmingly due to the administration's tax policies of the past four years. Bush is now proposing cutting billions from programs relied upon by poor and middle class Americans, while he spent the past four years giving money back to people -- disproportionately wealthy people -- in the form of tax cuts. If Bush really wanted to be "tough" on the fiscal situation, he would roll back some of his costly tax cuts. For more information on today's release of the budget, see this article as well as this assessment from the Center for American Progress.

Last week a bipartisan group of fifty Senators urged President Bush to release the remaining $200 million in Low-Income Home Energy Assistance Program (LIHEAP) funding contained in the FY 2005 omnibus appropriations bill. The letter said, "We believe the heating crisis facing low-income Americans warrants the immediate release of emergency LIHEAP assistance." LIHEAP provides bill payment assistance, energy crisis assitance, and weatherization and home repairs to primarily low-income families to help them battle extreme weather conditions and maintain a certain standard of living. It is encouraging the half of the Senate recognize the program's importance and acted on this through a letter to Bush. More information about LIHEAP can be found here and here.

In September of 2004 the Congressional Budget Office (CBO) estimated 10 year deficit levels to be $2.3 trillion. Their recent Budget and Economic Outlook shows this 10 year deficit projection improving, as they now predict deficit levels to be $1.4 trillion over the next ten years. These numbers are misleading. The reason for this improvement is because in their previous report, the CBO included $115 billion per year through 2014 for supplemental defense expenditures in Iraq and Afghanistan. In their current estimates, the CBO includes no supplemental funding for Iraq and Afghanistan. This discrepancy exists because CBO is required by law to base their projections only on current law. The CBO report acknowledges this and includes adjustments to their previous projections in order to have a fair baseline to compare the ten year deficit. When this adjustment is made, CBO reports that ten year deficit levels will actually increase by half a trillion dollars, or 0.3 percent of GDP; three-quarters of this increase is due to legislation surrounding the extension of tax cuts. Similarly, CBO projections fail to take into account some costly policies that are widely expected to become law in the near future. These include:

reforming the Alternative Minimum Tax;

extending expiring tax cuts; and

creating private accounts in social security. Given the potential costs of the policy issues listed above, as well as projected increases in health care costs, it would be foolish and irresponsible for policymakers to think they can sufficiently meet those priorities while attempting to make Bush's tax cuts permanent. To do so would explode deficits far beyond any projections we are seeing today. For good articles on the Budget and Economic Outlook released yesterday, read this article in the Washington Post and this article from Bloomberg news. To read more about why CBO projections tend to underestimate the real picture of the deficit read this analysis by economist John Irons. Written last fall, Dr. Irons explains his take on why ten year budget deficits will most likely be much greater than any predictions from the CBO.