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FEBRUARY 23, 2005
THE BUSH BUDGET: ALL
GUNS, NO BUTTER – by Greg Tarpinian
President Bush’s
$2.57 trillion budget for 2006 increases military spending by 4.8
percent – not including the war in Iraq – and cuts all other federal
government programs by 0.5 percent. The deepest cuts are aimed at
services for working Americans and the poor.
The primary purpose
of this budget is to fund the war machine needed to push foreign policy
objectives in the Middle East and to guarantee military dominance in the
world. It represents a 41 percent increase in military spending since
2001. For fiscal 2006, that spending will rise to $419.3 billion, not
including the $100 billion for Iraq and Afghanistan, and billions more
for the military, hidden in other agency budgets.
U.S. military
spending is now larger than the rest of the world’s combined. The second
largest is by China, at $51 billion, followed by Russia at $50.8
billion, Japan at $41.4 billion and the United Kingdom at $41.3. Iran
and North Korea – the two countries that Bush most often cites as
military threats – spend about $5 billion each.
The Bush budgets no
longer represent simple adjustments or new priorities in spending, but a
set of fundamental changes. These include redirecting nearly all federal
resources to the military, channeling huge amounts of spending to the
private sector, shifting the tax burden away from the corporations and
the wealthy and onto the working class, and relying on deficit spending
to finance the military buildup without raising taxes.
The deficit for 2005
will top $427 billion and bring government debt to nearly $5 trillion.
Mr. Bush cheerfully projects a 2006 deficit of only $390 billion, but
this projection is based on estimates of economic growth and tax
revenues that are out of line with expert forecasts. Foreign government
banks will finance almost half of this borrowing.
Nor does the 2006
budget include any allowance for the $2 trillion in transition costs
that will occur if the Social Security privatization plan makes it
through Congress.
Mr. Bush has also
changed federal procurement policies. Such spending now stands at $275
billion a year, with huge increases in outsourced services from private
companies. Private contractors working for the U.S. government now
outnumber federal employees by 2 to 1.
Some of the deepest
budget cuts for 2006 will hit federal grants for vocational education,
anti-drug efforts and literacy programs. The budget for health and human
services is down 1 percent from 2005. It also slashes spending for
housing and urban development by 11.2 percent and cuts funding for food
stamps by $1.1 billion. Funding for the Labor Department is set at $11.5
billion, down 4 percent from 2005.
But the most damaging
long-term aspects of the 2006 budget are provisions for making the Bush
tax cuts permanent, which will guarantee huge ongoing annual deficits,
add $10 trillion to the national debt over the next 20 years, and shift
more of the tax burden onto workers.
Under this plan,
corporate income taxes will represent just 10.1 percent of federal
receipts in 2006, falling to 9.1 percent by 2010, while individual
income taxes will contribute 44.4 percent of revenues in 2006, rising to
48 percent by 2010. The portion of revenues paid by corporations during
Mr. Bush’s tenure is the lowest ever recorded. As a percentage of GDP,
corporate taxes are at their lowest point since the Great Depression.
Bush and the
Republican majority in Congress argue that the domestic spending cuts
are necessary to restrain spending, but this claim is a thin guise for
the militarization of federal spending and permanent deficits created by
tax cuts.
–
© 2005 Labor Research
Association. Greg Tarpinian is the president and executive director,
Labor Research Association, a New York City-based non-profit research
and advocacy organization that provides research and educational
services for trade unions.
www.laborresearch.org
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