Chairman Spratt on President Bush's Budget
Chairman John Spratt's opening statement:
"It is a pleasure to welcome Jim Nussle back to the House Budget Committee. Jim chaired this committee for six years, honorably, graciously, and fairly; and his presence still looms over this room in the portrait that hangs just behind me. Jim, we are glad to greet you now in your elevated position as Director of OMB and member of the cabinet."Herblock used to run a cartoon in the Washington Post after the inauguration of a new president. It depicted an empty barber chair and this caption: 'Every new president deserves a free shave.' In that vein, we will tread lightly. But after you take some of our questions, you may wish you were sitting on the dais and not in the witness chair!
"The Bush Administration begins its last lap with its budget for 2009, and after seven years, we look for evidence of lessons learned. But the budget before us seems to bear all the hallmarks of previous budgets: more tax cuts, more deficits, more debt, offset by draconian cuts in Medicare and Medicaid, and smaller but significant cuts in such things as the Social Services Grant and the Community Services Block Grant.
"President Bush took office with an advantage no president in recent history has enjoyed -- a budget in surplus, big time surplus, $236 billion in fiscal year 2000. His economists estimated that over the next ten years, cumulative surpluses would amount to $5.6 trillion.
"His first budgets suggested we could have it all -- guns, butter, and tax cuts too -- and never mind the deficits. But by the year 2004, the surplus was gone, vanished, replaced by a deficit of $413 billion---in nominal terms the largest deficit in American history.
"For fiscal 2009, the Bush Administration projects a deficit of $407 billion, very near the record level in 2004. But in calculating this deficit, the Administration has inserted a $70 billion plug for the cost of our deployments in Iraq and Afghanistan in 2009, and nothing thereafter. The Administration also assumes that the alternative minimum tax will be fully in effect after 2008, reclaiming with one hand the tax cuts extended with the other.
"In short, the Bush budget understates spending and overstates revenues. If realistic adjustments are made for our deployments in Iraq and Afghanistan, and if the AMT is adjusted so that it does not apply to middle-income taxpayers, by our calculation, the deficit is $440 billion, a new record.
"When President Bush took office, the national debt stood at $5.7 trillion; today it is $9.2 trillion and rising, projected to increase to $9.7 trillion by the time the President leaves office, up $4 trillion in eight years. This is the legacy left to our children and grandchildren.
"To move the budget to balance, and still renew the tax cuts passed in '01 and '03, and also extend other expiring tax concessions, plus pass some new tax cut initiatives, this budget proposes:
· Cuts in Medicare of $556 billion over 10 years.
· Cuts in Medicaid of $47 billion.
· $5 billion in fees on veterans.
· $86 billion in new user fees.
· This budget wipes out completely the Social Services Block Grant and the Community Services Block Grant, two longstanding pillars that hold up the safety net.
· It wipes out 47 educational programs.
· It wipes out the Weatherization program and cuts LIHEAP by $570 million at a time when fuel prices are soaring, and the existing program serves just a fraction (16%) of those who qualify.
· It cuts EPA by $330 million for 2009, and Centers for Disease Control by $433 million in 2009.
"At the same time, the Administration:
· refuses to submit a realistic supplemental for what our deployments in Iraq and Afghanistan are likely to cost over the next five years. Since the request for fiscal '08 is $189 billion, this is a significant omission, easily $500 billion dollars.
"The Administration also:
· refuses to submit its construct of a permanent fix to the alternative minimum tax (AMT), so that it does not come down on middle-income families for whom it was not intended. Instead, it lets the AMT remain on the books, fully effective after 2009, when everyone knows this is not fair or politically viable.
"Faced with huge deficits and mounting debt, President Reagan changed the thrust of his budget by signing TEFRA in 1982 and Gramm-Rudman-Hollings in 1985. The first President Bush agreed to a budget summit and signed into law the resulting five-year plan. President Clinton made deficit reduction his top priority, and within a month of taking office, sent Congress a five-year plan to cut the deficit by more than half. Five years later, he finished the job with the Balanced Budget Act of 1997.
"It seems to us that far from proposing a plan to fix the budget, the Bush Administration is proposing policies that will worsen it, and is leaving the consequences for the next administration and next generation to fix.
"Mr. Director, we have many questions for you and are looking forward to hearing your testimony. But before you begin, I want to allow our Ranking Member for the day to make his opening statement. Mr. Ryan, we are told, is snowed under in Wisconsin."