It’s a rainy Sunday afternoon in Washington, D.C., not at all pleasant for touring the monuments and museums.
So, what better way to wile away the hours than to chat about the over-bloated U.S. federal budget with Dr. Douglas Rice of the Center on Budget and Policy Priorities, a Washington think-tank.
Here’s four basic things that you should know about the U.S. federal budget:
First, President George W. Bush’s budget plan makes permanent some big tax cuts (mainly for the richest of Americans), at a cost of $500 billion over the coming years;
Second, President Bush is continuing with huge increases to defense and homeland security, which will add another $200 billion (and this doesn’t include the appropriations for Iraq and Afghanistan, which will add hundreds of billions more);
Third, to help cover the cost of tax cuts for the rich and spending increases for military and security, President Bush is proposing a $100 billion cut in “discretionary” spending on social programs, including affordable housing.
Of course, those spending cuts that primarily affect low, moderate and middle-income Americans are pretty painful, but they don’t come anywhere near covering the cost of the massive tax cuts for the rich and spending increases for bombs and spies.
Which brings us to the fourth observation: Over the next seven years, the U.S. federal budget deficit will balloon by at least $900 million, according to Dr. Rice.
The Bush administration is constantly lecturing the rest of the world about financial management, blah blah blah. The U.S. government even arrogates to itself the sole prerogative of appointing the head of the World Bank (who is supposed to set the tone of good fiscal management for the rest of the world).
One final, gloomy note: The projection of a sky-high deficit (bigger than ever in the history of the U.S. and the world) could get even worse if there are any financial shocks (like the U.S. housing bubble bursting, or China deciding to shift from the dollar to the euro as its base currency).
The current gang in power in Washington never billed themselves as having a social conscience, so the spending cuts are not surprise. But they did migrate into government from a variety of business backgrounds, so they were supposed to be decent managers.