Add an entry to the Endangered Species List: the deficit hawk.
President Bush unveils his 2005 budget proposal today, a document that will be soaking in red ink. Making matter worse, the White House concluded last week that the Medicare prescription drug benefit narrowly approved just weeks ago will cost a third more than anticipated, growing by an unbelievable $139 billion — to a projected $534 billion — over 10 years. And that’s just the latest guess. Anyone willing to bet the price won’t be higher when the benefit kicks in two years from now?
That such a discrepancy could surface so quickly after passage is distressing. Perhaps the president relied on the same intelligence sources that pointed to chemical and biological weapons in Iraq. But what’s even more frustrating is that the White House and Congress don’t appear concerned that our fiscal house is in a state of disorder that could lead to collapse.
The president’s fiscal credibility is teetering, to say the least. It was hard to take him seriously when he said Friday that his goal is still to cut the deficit — pegged at more than half a trillion dollars this year — in half by 2009.
"Congress is now going to have to work with us (to reach that goal), to make sure that we set priorities and are fiscally wise with the taxpayers’ money," Bush said. "I’m confident they can do that if they’re willing to make tough choices."
Tough choices? How about some leadership by example?
The president appeared unfazed by the Medicare price jump, still trumpeting that it represented a promise delivered to seniors. He and many in Congress don’t seem the least bit concerned that record deficits threaten the nation’s economic stability, especially as the huge Baby Boom generation moves into retirement and begins collectING Social Security and Medicare benefits. And eventually, the amount of government borrowing could drive up interest rates, dampening the economy and making the revenue picture even worse.
Democrats have little standing as fiscal disciplinarians (the surpluses of the Clinton years were fueled largely by unsustainable growth in the technology sectors), boasting a long history as big spenders. In an election year, their calls for discipline are hard to take at face value.
It’s time for Federal Reserve Chairman Alan Greenspan to inject himself into this mess. He remains one of the few credible voices in favor of fiscal discipline, and he should be sounding a very loud alarm. Greenspan has warned occasionally about the dangers of growing deficits, favoring spending cuts over tax increases, but needs to do so more forcefully.
The White House and Congress are unwilling to keep our fiscal house in order by themselves.
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