Sleight of Budgeting - New York Times

September 21, 2005
Sleight of Budgeting
The decision by Congressional leaders to delay action on their tax-and-spending bills was most welcome. The bills' broad outlines were drawn up pre-Katrina, and were objectionable even then: spending cuts totaling $35 billion over five years in programs for low- and moderate-income families, and $70 billion in new tax breaks, mostly for the most affluent families. Counting interest, the bills would increase the deficit by $40 billion over five years.

Post-Katrina, those plans would be scandalous, highlighting the skewed priorities that have put the country into a tight financial spot as it copes both with hurricane damage, and with the social and economic rifts that Katrina has exposed.

Unfortunately, it's increasingly unclear why Congress imposed the delay. (The deadlines were shifted into October and early November.) Initially, it appeared that lawmakers needed time to recast their priorities - away from budget cuts that would reduce the aid for hurricane victims and other needy Americans, and away from high-end tax cuts that would needlessly starve the Treasury at a time of mounting rebuilding costs.

Now, however, it appears that postponement may be only a tactical move to recast Katrina as the event that requires Congress to hack away at existing programs to pre-empt unacceptably large deficits from reconstruction spending. That's false.

Katrina cannot and should not be paid for by cutting government programs, unless the goal is to end up with a government that's even less effective than it was before Katrina. True, there's fat that Congress should trim. But even if members of Congress were willing to rescind the porkiest of the pork spending they approved in the highway bill passed last summer, doing that would raise about $24 billion.

That would be a nice offset for the estimated $200 billion price tag for Katrina, but hardly enough. Bigger cuts that have been suggested, like delaying the start of the Medicare drug coverage plan, are not workable, not to mention political nonstarters for President Bush and for Republican leaders.

What is needed most is more revenue, and that requires Congress to stop cutting taxes.

But Congress appears to be angling to proceed with business as usual while disguising what it is doing. If all goes according to plan, Congress will take up the spending-cut bill weeks before the tax-cut bill.

That would be the first time lawmakers had split such deficit-bloating legislation into two separate bills, raising the suspicion that they're trying to hide the fact that $35 billion in spending cuts, heartless and misguided as they are, would be used to help pay for the $70 billion in new tax breaks - not for deficit reduction and certainly not for Katrina.

The lawmakers' only responsible course of action is to give up on tax cuts, but they are balking. Wedded to tax cuts himself, President Bush cannot lead them where they need to go. It's up to the American people to push their representatives in the right direction.


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