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Watch the Pork Barrel, Not His Lips : After both sides preserve their welfare programs, Bush will have no choice but to abandon his “no new taxes” stand.

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<i> Benjamin Zycher is an economist in Agoura Hills and an adjunct scholar at the Cato Institute in Washington. </i>

O, what a tangled web it weaves, when first the Bush Administration practices to deceive.

Why is the President about to abandon his “read my lips” doctrine? Do not be fooled by the sudden “concern” on the part of Bush about the budget deficit, which in combination with the “no new taxes” pledge has served the Administration’s stated ends admirably. After all, the combination of “no new taxes” and the Gramm-Rudman constraints on borrowing has yielded a dramatic decline in the growth rate of federal spending, particularly as a proportion of gross national product. Is that not what Bush wants?

No, we must dig deeper. Let us return to the beginning of the year, when the Administration’s proposed budget assumed a decline in real interest rates and continued strong economic growth. This allowed Budget Director Richard Darman and other Administration pooh-bahs to view potential spending reductions under Gramm-Rudman with a certain smugness; any cuts in defense would be no greater than those likely to be forced by Congress in any event in light of the new security environment. And some small cuts in domestic programs would demonstrate “toughness.”

What a difference a few months make. That this fiscal “conservatism” was cheap has been made painfully obvious by the stark reality that the economic assumptions in the budget have come a-cropper. Real interest rates have gone up while economic growth is down. Accordingly, what looked like a small or moderate reduction--at most, about $25 billion--now has turned into an $80-billion monster.

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From the standpoint of the Administration, it now is impolite to mention all that old talk about bloated government and Democrat profligacy, however true it was on its own terms.

Instead, the time has come for a budget summit with “no preconditions” because good, solid Republican welfare programs are in danger. There are the Export-Import Bank subsidies, largely a trough for aircraft manufacturers. There is the super-conducting super-collider, a multibillion-dollar toy; pull the cord and it emits a siren song for the Texas vote in the Electoral College. There is the space station, a boondoggle with no defined purpose other than provision of busywork for the space shuttles, themselves justified years ago as needed adjuncts for the future space station. There are the subsidies for the ubiquitous water projects, without which the Army Corps of Engineers actually might have to find honest work. And let us not fail to mention the various farm subsidy programs, the source of higher food prices, enormous resource waste, considerable environmental damage, many, many billions in spending and a good number of Republican votes. And do we really need such large armed forces under current international conditions?

The Administration hopes that a decline in the deficit will reduce interest rates, but that effect will be small. The only way to make it big will be to increase taxes in such a way as to reduce business investment, but that will hardly be salutary for the economy as a whole. And all this talk about enhanced budgetary “control” for the Administration as an outcome of the budget summit is just so much hot air. The line-item veto, for example, assumes that Presidents systematically will be willing to take the political heat for cutting while others get the credit for saying “yes.” Don’t bet on it.

And George Bush--a man without clear thoughts on policies in particular or policy in general--is most unlikely to do so. Consider the forthcoming avalanche of Democratic welfare. He will not veto the clean air bill, a blob of pork that will guarantee bankruptcy for small businesses, even as it does little for air quality but much for various special interest groups and the coercive authority of aspiring bureaucrats. He will not veto the civil rights bill, a measure that has little to do with “civil rights” but which will force the nation to adopt racial quotas as a matter of course. He will not veto the Americans with Disabilities Act, a guarantee of full employment for the lawyers.

The much-ballyhooed budget summit will produce little or nothing in terms of true spending reduction, just as an identical exercise in 1982 did not. This is sad because, as a crude generalization, Democratic welfare hurts the poor but expands the bureaucracy, while Republican welfare creates troughs at which only white elephants feed. Some excise taxes are likely to rise, providing more fuel for the federal spending machine. And the Gramm-Rudman deadlines will be allowed to slip, thus removing another constraint on spending. If you read Bush’s lips, you will find that he cares more about special-interest largess than about taxes, new or old. That is, until he reads the opinion polls. Taxes, anyone?

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