Federal Budget

• Halving the Deficit Will Involve Major Changes -- or 'Fuzzy Math'
• Social Security Reform Comes Front and Center
• Seen and Heard: 109th Congress Opens With a Host of Tough Issues

Bush's first term was marked by the passage of excessive tax cuts. This year alone, the cost of those tax cuts will be $ 215 billion. Roughly $ 47 billion of that amount will go to the top 1 percent, or in other words a group of people whose average income is about $ 1 million per year. These tax cuts are not paid for, and are significantly more costly than the war in Iraq, Medicare drug benefits, and the projected social security shortfall. It is no secret that our deficit and national debt are disturbingly high and not on track to be responsibly repaired any time soon. Adding to the deficit burden is the cost of these excessive tax cuts. How will the administration choose to deal with this? When the President releases his budget in early February, we may very likely see that his solution will be to freeze or significantly cut non-defense discretionary spending. Another way to view non-defense disretionary spending is to think of it as services for people paid for by the federal government. This means education, medicaid, medicare, child care, environmental protection, veterans' health care, housing and many other programs. The administration and Congress seem to think that taking away from these programs to give $ 47 billion back to the rich this year is how to solve our fiscal problems by "growing the economy." Taking away necessary and vital programs used and depended upon by millions and millions of people in order to give a sizeable chunk of that money to the rich will not grow anything except the size of the gap between the rich and the poor in this country. Check out this link for an informative editorial in today's Washington Post.

Jobs growth data for December 2004 was recently released. Below are the facts. This data comes from the Economic Policy Institute's JobWatch web feature. Click here for background documents.

Job creation failed to meet the administration's projections in 15 of the past 18 months.

Job growth over the last 18 months has fallen short by 1,703,000. This number is more than one-third less than the number of jobs the administration said would be created, even without the tax cuts.

The administration expected the tax cuts to generate 1.4 million jobs. This did not happen. The administration expected a little over 5.5 million jobs to be created between June 2003 and December 2004. In reality, only 2.4 million jobs were created.

Job growth in December of 2004 fell almost 150,000 jobs short of projected estimates for that month alone. In other jobs related news, an article in yesterday's New York Times discusses the fact that even though overall unemployment levels may have dropped, the number of workers who have been jobless for over a period of 6 months has remained very high. Six months is the point at which unemployment benefits run out for people, and as of November 2004, one in five unemployed workers were jobless for more than 6 months. A total of 3.6 million workers ran out of unemployment insurance last year, and according to the Times, this statistic is higher than it has been in at least three decades. President Bush and prominent members of Congress seem to believe that tax cuts will create more jobs. The numbers, however, do not appear to be lining up.