The next president's fiscal albatross

Rocky Mountain News

Thursday, May 15, 2008

Congress has done the next president no favors. The House and Senate have agreed on a budget resolution that postpones the tough decisions on taxes and spending until next year.

The resolution is nonbinding and does not require the president's signature but it sets spending targets for the fiscal year starting Oct. 1. The plan calls for spending $3 trillion, which is $20 billion more than Bush asked for.

The actual money is voted on separately in a series of 12 appropriations bills that Congress is chronically unable to enact in time. And it looks like that will be the case this year too, but for tactical reasons rather than legislative inertia.

Bush has vowed to veto many of the Democrats' spending plans so the Democratic Congress may use a stalling device called a continuing resolution to postpone voting on the appropriations bills until the new president takes office. It is every bit as chaotic and inefficient as it sounds. Basically, the Democrats plan to run the clock out on the Bush presidency.

The budget resolution does nothing about the fast-rising costs of Medicare and Medicaid. It assumes that Congress will enact another fix to stop the unpopular Alternative Minimum Tax from snaring 20 million families, but it does not contain the $70 billion tax increase the House approved to make up for the lost revenues.

Bush could not get some of his first-term tax cuts - on middle and upper bracket taxpayers, capital gains, inheritances and dividend income - made permanent when the Republicans were in charge and now it appears the Democrats will let them expire on schedule in 2010. The public will see that lapse as a tax increase and, after so many years, that's what it will be.

The Congress did agree to keep certain middle-class tax cuts - the $1,000-per-child tax credit, a reduction in the marriage penalty and the 10 percent tax bracket.

The budget plan also comes with hidden costs. It does not assume any spending on Iraq and Afghanistan after 2009. Even so, the new president will take office facing a deficit on the order of $400 billion.

The next president, whether John McCain, Barack Obama or Hillary Clinton, will face a sobering reality. All those promises of new programs and tax cuts made during the campaign? There's no money to pay for it.

• May 15, 2008

  7:07 a.m.

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  Gene writes:

  And there are many more promises to be made during the real campaign. Maybe that is it. The RMN may have hit on it. From the slate of candidates on each side, it appears neither party really wants to win the White House.

• May 15, 2008

  7:27 a.m.

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  Spencer writes:

  Bush has left a mess. War without a reason and no way to pay for it.

• May 15, 2008

  8:12 a.m.

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  irisman writes:

  So, what else is new?

• May 15, 2008

  9 a.m.

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  dilligaf writes:

  Good move on the democrats part. Bush has screwed everything he has touched. It's time to limit what he can mess up for the next 7 months.

• May 15, 2008

  10:07 a.m.

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  SASQUATCH writes:

  "All those promises of new programs and tax cuts made during the campaign? There's no money to pay for it."

  NO MONEY...REALLY? LOOKS A LOT LIKE RITTER'S COLORADO...TIME FOR A FEW DOZEN NEW "BLUE RIBBON COMMISSIONS!"

• May 15, 2008

  11:58 a.m.

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  davies writes:

  dilligaf: "Good move on the democrats part. Bush has screwed everything he has touched."

  The article says the Dem-majority House and Senate have approved a budget resolution calling for spending $20 billion MORE THAN BUSH REQUESTED.

  Yup, good move on the democrats part. Real brave stance there dems, of the famous "pay-as-you-go" promise.

• May 15, 2008

  12:20 p.m.

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  mytwosense writes:

  I love how the RMN positions this as "Congress's" fault entirely, assessing no blame to the current president's fiscal policies (or lack thereof).

  I'm actually glad that Congress has stopped giving this president a blank check for his military expenditures. I recently learned that a lot of that money went towards COST-BASED contracts. So, private companies doing contract work in Iraq (much of it work that used to be done by our military service people) actually have more of an incentive to overspend and waste valuable resources. In fact, I saw footage of trucks and other equipment deliberately on fire because they were "no longer needed." I also saw footage of expensive vehicles being leased by contract administrative workers, footed by our taxpayer dollars. Meanwhile, actual soldiers were sleeping in leaky mildewy tents.

  Disgusting.

• May 15, 2008

  1:33 p.m.

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  doneDad writes:

  All three branches of our federal government are out of control; and so are both major parties. Using generally accepted accounting practices (GAP) our government is $70 trillion in hock; yet the politicans keep insisting on spending more money they don't have on stuff we don't need like wars in Iraq and Afganistan. As they say: "Stick a fork in us, we're done!"

• May 16, 2008

  6:14 a.m.

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  alcambell_9 writes:

  Eliminate the ear marks, where did they get that term anyway, sounds like a hippy physical problem, I still like Pork Barrel, anyway that would reduce the budget by, oh lets say a trillion dollars. Then if we reduced legislators wages and perks, another one of those terms, for non-performance or inability to think or stupitity, we would have a manageable budget.

• May 16, 2008

  7:40 a.m.

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  Lowtaxequalsfreedom writes:

  Hey if you people want a government that wipes you but and conquers the world it is going to cost you.

  There is no free lunch.

• May 16, 2008

  9:09 a.m.

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  anarchist writes:

  mytwosense posts in part "I love how the RMN positions this as "Congress's" fault entirely, assessing no blame to the current president's fiscal policies (or lack thereof)." It is Congress that sets funding, not the President, the President may ask for funding, but its up to Congress to provide or deny it, therefore if you have a problem with the budget and spending, direct it where it belongs, Nancy Pelosi.

• May 16, 2008

  2:16 p.m.

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  mytwosense writes:

  anarchist, until the Dems finally won back more seats in Congress, the Republicans pretty much gave Bush every bit of funding he asked for, no questions asked, and that includes billions of dollars in cost-based contracts with private companies. In case you haven't noticed, in the last two years Bush has complained non-stop that Dems are holding up funding for his war.

  It's called fiscal oversight, and it's something the conservatives used to pride themselves for doing.

  I have no problem with Pelosi for making sure my tax dollars aren't going to pay for unchecked looting. I do have a problem with the formerly Republican-controlled Congress who allowed this, under the direction of Bush.

• May 16, 2008

  10:22 p.m.

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  Sweetpickle writes:

  Paying for the war provides a perfect excuse to end social welfare programs.

• May 18, 2008

  11:11 a.m.

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  anarchist writes:

  Sweetpickle, keep dreaming, comrade Pelosi and her ilk will see to it that you continue to pay more and more for thier socialist welfare programs, it is a major reason they oppose the war.
  Mytwosense, fiscal oversight, "The resolution is nonbinding and does not require the president's signature but it sets spending targets for the fiscal year starting Oct. 1. The plan calls for spending $3 trillion, which is $20 billion more than Bush asked for.", I am curious in there exactly where it is that Pelosi exercises her campaign promises to cut spending, talk about "unchecked looting" I think she does it quite well.

• May 20, 2008

  1:53 p.m.

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  Jonjonmon writes:

  spencer,
  excuse me but the democrats just objected to 109 billion dollars to the war that Bush said would give the next president some cushion once he or she is sworn into office. Now look who doesn't want to pay for the war? Nanci Pelossi and fellow democrats.