2007 Budget

The 2007 budget was released by the Administration yesterday and immediately pronounced dead on arrival by members of Congress, economists, and commentators. It contains few surprises unless you are one of those dedicated Bush supporters who believe all his public utterances. Defense and security are to be increased over present spending by 51%. The following agencies will receive percentage cuts: Education 3.8% (so much for the SOTU science and math emphasis); Justice 7.2% (since Attorney General Gonzales told the Justice committee yesterday that the President can do what ever he wants, we no longer need Justice lawyers justifying Administration actions or, disloyally, taking issue with them); EPA 4.0% (global warming is really making the winters a lot more bearable); Transportation 9.4% (keep buying those cars and keep using Middle East oil); and Labor 3.9% (of course!).

The budget actually contains money for Iraq and Afghanistan in a rare fit of honesty compared to prior budgets that just ignored those expenditures. However, it is only $50 billion. So far this year we are going to spend $120 billion. Does this mean a troop reduction? Nope, probably just a supplemental request in the middle of the year that never gets compared to the original deficit.

The budget deficit is $350 billion, although this is really a misleading figure. Social Security will take in $884 billion and payout $586 billion. This leaves a surplus of $298 billion - to be used to cover the looming Social Security crisis (remember last year’s SOTU proposal). That is a nice thought, but that is not how it works. The surplus just gets tossed into the income side of the budget and is used to offset 2007 expenditures and we create a Treasury promise to pay the $298 billion, with interest, sometime in the future after this administration is out of office. If we really budgeted honestly, the 2007 deficit would be $350 billion plus the social security surplus of $298 billion for a whopping $648 billion deficit.