The Senate Budget Committee met October 26 for its final vote on the budget reconciliation package that will go to the floor for a full vote next week. I watched a good part of the "debate" on C-Span. It was an experience in alternative universes. First, the Republican Chair presented a rosy chart of the constant growth of the tax revenues, due almost entirely in his account to the wonderful tax cuts that Republican federal government has enacted. Tax cuts worked, he proclaimed, because they put money back in the hands of the wealthy entrepreneurs that establish businesses and are the heart of the economy. He praised the work of Republicans to create sanity out of a federal government gone mad with entitlement spending, using the term "deficit reduction package" over and over again to describe this season's budget building effort. To hear his speech, one would think that the country was operating in fiscally sound conditions, using its resources and avoiding wasteful expenditures. Other Republican speakers repeated the "deficit reduction package" mantra. For the first time, this universe's inhabitants proclaimed, this government is taking responsibility and working to reduce the deficit.
The minority ranking member Conrad outlined the other view of the universe second, providing chart after chart methodically decimating the "deficit reduction" claim of the majority. He illustrated the move from surpluses under Clinton to deficits under Bush. Noting that the future will show deficits reaching out to the horizon and growing deeper over time, he showed how the corresponding chart for the national debt reaches upward to the heavens, from our current $8 trillion to $11 trillion shortly and continuing upward, especially if interest rates increase (as they are likely to) resulting in higher and higher debt service burdens. While the Republicans touted $35 billion in budget cuts (mostly to programs that serve the poor, see below), they disregard the bigger hole created by $70 billion in new tax cuts for the wealthy, mostly being funded by borrowing money from China, Japan and the UK, with the US looking forward to a kind of neo-colonial status as foreign countries own more and more of our assets. (Some of this group don't even bother to disseminate on this scorer any more. Connie Mack appeared on last Sunday's talk shows pushing multi-millionaire estate tax relief standing on a rickety two-legged stool of claims (1) that the estate tax costs people their family farms (simply wrong) and (2) that the federal government can costlessly pay for the billions in lost tax revenues by simply borrowing even more heavily from China and Japan!)
For a description of the budget bill without any acknowledgement of the two universes described above, look to the Wall Street Journal's Oct 27, 2005 article "Deficit-Cut Plan Advances in Senate" by David Rogers (at A6).
Here's another bit of the dark side of the rosy universe drawn by the majority members of the Committee. The final budget reconciliation bill will likely provide the final authorization for opening up the Arctic National Wildlife Refuge to Big Oil's devastation, sold to the public under the promise of cutting energy prices even though it will take ten years to begin production and in spite of what we know both about Big Oil profiteering and the need for conservation rather than the pipedream of continued increases in output to meet China's ravenous appetite and our own undisciplined consumption. This is the universe of take America's heritage from the people to give to the already rich Big Oil.
The bill will likely cut Medicare and Medicaid--at a time when more of our children have no health care whatsoever and vast majorities of the American people say universal health care should be a high priority even if it means higher taxes to achieve it. Instead, the Senate Committee's package cuts billions from these programs, but it does redirect $10.8 billion in these Medicare "savings" (read--reduction in health care provided to the poor and lower-middle-income Americans) to increase physicians' reimbursements (a 1% increase, instead of a 4.4% scheduled cut)! This is the universe of take from the poor to give to the rich.
The bill will likely cut food stamps funding, at a time when poverty is increasing in this country as etched on our consciousness by the Katrina evacuees' desperate situations. As many as 300,000 low income individuals may be denied benefits under the House Agriculture Committee's version of the food stamp cuts, while the House Energy and Commerce Committee approved billions in savings from Medicaid. See David Rogers, House Panel Votes to Cut Food-Stamp Funding, Wall Street Journal, Oct. 29, 2005, at A4. This is the universe of take from the poor and let them eat cake.
The final budget reconciliation bill will also likely provide another opportunity for this Congress and administration to reneg on their promise to rebuild the Gulf Coast and help Katrina's impoverished victims, the two salient priorities that Americans grasped so viscerally after the hurricane hit. More and more, Congress is finding they need not spend as much as they had expected on Katrina's victim sor make the necessary sacrifices (bridges to nowhere in Alaska come to mind) necessary to fund wetland restoration in Louisiana. Various projects have been proposed, from small experimental projects as described here, to vast restoration of the Mississippi delta, described in a multiple-page story in Sunday's New York Times (not yet available online). Congress has not been willing to fund these projects, yet without them the marshlands of the Mississippi River delta are losing 25 square miles a year to erosion. This is the universe of take from our natural resource heritage, and use it to fund boondoggles to keep current politicians in power.
Congress is also shifting the funds it has already authorized for emergency use after Katrina, as you can read in this October 29 New York Times story. It indicates that only $2.2 billion of the White House's request to transfer $17 billion of approved hurricane relief funds from FEMA to other agencies will be used for Housing and Urban Development programs for low-income Gulf Coast residents. A good portion of the $17 billion redirected funds will be used by the military to repair military installations and ships (possibly done under contracts already in place with Halliburton and similar companies). This is the universe of take from the disadvantaged, and give to crony corporations.
As the budget reconcilian process winds it way to a close, one can only hope that the current Congress will step back and realize that the decisions it makes now affect the coutry and its citizens for the long term. If we continue to refuse to face the need for investments in infrastructure, from restoring wetlands to investing in expanding human capital through education, we will pay with an inability to compete in the brave new world of the 21st century. If we continue to withdraw safety nets from the middle and lower classes while the boons of economic growth go almost entirely to the upper quintile we will face a social crisis of unforeseeable dimensions.
Taxation is the way that we fund the priorities we have established for ourselves. In a democracy, these decisions must be taken with imput from the people and attention to their demands for health care, wildlife protection, and attention to the quality of life concerns all share. It is time for the country to deliberate about these measures, rather than holding mock rhetorical battles based on alternative universes that share no common ground.