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Budget deficit at record { February 1 2004 } Original Source Link: (May no longer be active)
http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/02/01/national1108EST0481.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/02/01/national1108EST0481.DTL
With budget deficit at record, Bush's fiscal discipline talk raises eyebrows
SCOTT LINDLAW, Associated Press Writer
Sunday, February 1, 2004
©2004 Associated Press
(02-01) 08:08 PST WASHINGTON (AP) --
President Bush is fond of demanding fiscal discipline from Congress, but even some of his supporters say he should practice what he preaches.
His administration's mushrooming cost projection for Medicare is the latest budget item to inflict sticker shock on the lawmakers he often lectures about profligate spending.
With the White House estimating the next budget deficit at a record $521 billion, fellow conservatives are beginning to question this staple of Bush's stump speech: "I came to this office to solve problems, not to pass them on to future presidents and future generations."
Chris Edwards, director of fiscal policy at the Cato Institute, chuckled when he heard the line, which Bush repeats at re-election fund raisers.
The administration's new 10-year cost estimate on the Medicare overhaul, which has risen from $400 billion to $534 billion, shows Bush "is willing to sign anything that came across his desk," said Edwards, who favors limited government. "All politicians talk out of both sides of their mouth."
In the face of such numbers, Bush was talking frugality Saturday.
"One clear signal we need to send to the American people and the markets is, `We're going to be wise when it comes to the expenditure of the people's money,"' Bush told congressional Republicans at a Philadelphia conference.
"We submitted a budget that says just that," he said, "and we look forward to working with you on it. You spend; I propose -- together we're responsible."
The formula did not work the way many in Congress wanted last year as the Bush administration avoided being pinned down on what it would cost to invade, occupy and rebuild Iraq.
Then, six months after the invasion, Bush hit Congress with the tab: $87 billion, a figure that left even many of his fellow Republicans gasping. That was to get through this budget year, which ends Sept. 30.
On Friday, the administration said it will not request more money for the Iraq operations until at least January, two months after November's elections.
The administration's projections on Iraqi oil revenues also were widely off the mark. Oil is bringing in a fraction of what Deputy Defense Secretary Paul Wolfowitz predicted last spring.
Early in his term, Bush said he opposed a farm bill that he said was too expensive and that contained sharp increases in subsidy rates.
In May 2002 he caved in and signed the bill, estimated to cost $190 billion, which angered many members of his own party.
As a candidate, Bush promised to add prescription drug coverage to Medicare, and in 2002 he set a price tag of $190 billion for getting it done over 10 years.
A year ago, as the outlines of overhauling Medicare became more clear, the administration estimated the cost at $400 billion.
On Monday, the White House in effect will concede that the Senate was right two years ago when it projected the cost at a half-trillion dollars. Bush's budget for the 2005 budget year, which he releases Monday, will project the cost of the Medicare upgrade at $534 billion over the decade ending 2013.
The same budget will forecast a budget deficit of about $521 billion, the highest ever in dollar terms, White House budget chief Joshua Bolten told the GOP lawmakers in Philadelphia.
Grover Norquist, president of Americans for Tax Reform and a conservative who is close to the White House, said he worries less about the deficit than about the spike in overall government spending.
"Total spending is the cost to future generations," Norquist said, invoking Bush's "future generations" line. He added that he thought several Bush initiatives, including health savings accounts and Social Security reforms, eventually will rein in overall federal spending.
Bush dodged questions Friday about whether he expects the ballooning Medicare cost estimates to upset fellow conservatives.
Instead, he repeated his belief that the new Medicare law will "provide modern medicine for our seniors" and reiterated his promise to cut the federal budget deficit in half over five years.
He also shifted the burden to the House and Senate, both controlled by his party.
"Congress is now going to have to work with us to make sure that we set priorities and are fiscally wise with the taxpayers' money," Bush told reporters during a meeting with economists. "I'm confident they can do that if they're willing to make tough choices."
©2004 Associated Press
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