Fiscal Responsibility, Adieu

Most years, the president’s spending proposals mark the opening salvos in the legislative tussle to draw up the annual budget. This year, the details of President Bush’s fiscal 2002 proposal came after its core provisions--a $1.6-trillion tax cut and a 4% limit on spending increase--already had been rejected by the Senate. That sets the stage for a messy partisan battle in which fiscal responsibility is likely to go out the window.

Built into Bush’s plan, disclosed Monday, are two big risks: a large tax cut based on imaginary revenue--a formula that in the Reagan era resulted in huge deficits--and unrealistic caps on spending. Already, the Senate has voted for a budget that increases discretionary spending at nearly twice the rate Bush proposes. With the even split between Republicans and Democrats in the Senate, it would be naive to expect the administration’s limits to be kept.

If the two parties start trading higher tax cuts for bigger spending, as will probably happen, surpluses will soon turn into deficits. At the same time, Bush’s budget does nothing to address the country’s most worrisome long-term problems, how to fund Social Security and Medicare for the nearly 80 million baby boomers who will start retiring in 10 years.

The administration insists that the spending limits and cuts are intended to shift funds away from programs that do not work to those that do. Some programs such as pork-barrel projects and costly farm subsidies meet this criterion, but they are the ones most likely to be restored by Congress. Limits or cuts for others, such as community development grants and urban venture capital investment, would merely undermine the social safety net.

The deep reductions in the Department of Energy’s conservation and renewable resources research program defy even the president’s own statement that conservation would save America billions of dollars over the years and make the country less dependent on foreign oil. In an unconvincing defense of the proposed cuts, Energy Secretary Spencer Abraham said it’s hard to justify programs “that have not helped us avert the energy crisis.” True, conservation alone would not solve the energy crisis that California is experiencing, but without it we no doubt would be spending more for energy, in addition to using more of it too.

Bush’s hit-or-miss budget plan is consistent in one respect. It is designed to make enough room for his enormous tax cut. The big danger now is that Bush will get his way on the tax cut and Congress will get its way on profligate spending.