Bush on the Issues II
Where the President stands on matters of vital concern to AFSCME members.
The March/April Public Employee asked and answered questions about the Bush administration's record on jobs, taxes, education and "outsourcing." Here we discuss five issues of similar importance: spending as much on domestic needs as on rebuilding Iraq; the federal budget deficit; the state budget crises and funding of critical services; and the ongoing threat to Medicare and need for a real prescription-drug benefit for seniors.
We have written the answers from such authoritative sources as the Center on Budget and Policy Priorities. If you have comments or additional questions, please submit them as a Letter to the Editor.
I hear the United States is spending billions to rebuild Iraq. Aren't we at the same time cutting back money to rebuild roads, bridges, schools and the like in this country?
Yes. Of President Bush's $87-billion budget request for military operations and services, and the rebuilding of Afghanistan and Iraq, about $20 billion was supposed to go for Iraqi reconstruction, such as a sound infrastructure, schools, improved health care coverage and public safety. During the budget debate, many members of Congress pointed out that Iraq's domestic needs were being treated more generously than those here at home.
U.S. Reps. Rahm Emanuel (D-Ill.) and Peter DeFazio (D-Ore.) introduced the American Parity Act to address those concerns. The legislation, which AFSCME supports, would require that any additional spending for Iraq's post-war reconstruction costs would be matched dollar for dollar with new investments in America's own education, health care, transportation, housing, social services and public-safety needs.
The bill — which the Bush administration strongly opposes — is currently bottled up in a congressional committee.
President Bush's new budget includes the largest federal deficit in history, but Bush says it will be reduced by half over five years. Is that possible, and why should we even care?
The federal government's annual deficit is growing far faster than our economy's ability to pay it off. Many economists say a continuation of massive deficits will reduce national savings and crowd out private investment. This will result in cuts of critical programs, services and public-sector jobs, and slow economic growth as the federal government is forced to make interest payments of $3.4 trillion on a relentlessly ballooning debt.
Bush converted President Clinton's record surplus into the biggest deficit ever. It could balloon to a record $521 billion for 2004.
In releasing his fiscal 2005 budget, Bush says his economic plan will cut the deficit in half in five years. But that claim rests on unrealistic spending cuts and unacceptable freezes on social programs, including job training and medical research and other popular services. The claim also excludes billions in expected spending on operations in Iraq and Afghanistan, and for the war on terrorism.
Bush has made the deficit worse by dramatically cutting taxes for the very wealthy. And now he wants to make his tax cuts permanent, which will obviously reduce the government's income in years ahead, putting a further strain on maintaining important services and reducing our debt.
Will Bush's proposed fiscal-year 2005 budget help states and cities with their fiscal crises?
No. America's states and local governments have large deficits, and President Bush's budget makes matters worse. His administration continues its pattern of foisting more responsibilities on state and local governments while cutting federal aid to them — leaving a nearly $200-billion budget gap over the past three years.
Federal policies affect states in a number of ways. For example, Bush's tax cuts for the rich have decreased revenues because most states use IRS regulations as the basis for their own tax operations. At the same time, the administration is keeping states from enacting taxes that might help close the budget gap — like those on catalog and Internet sales. The total loss in state taxes runs into the tens of billions of dollars.
The new obligations Bush has imposed on lower-level governments also cause problems. These unfunded mandates — homeland security, election reform, education of disabled children, the No Child Left Behind law — are costing cash-starved states and localities $23 billion to $83 billion yearly.
Many state programs serve as safety nets, kicking in during economic downturns to help families that have lost jobs or income. The unfunded mandates and lack of federal support have stretched state budgets to the limit, forcing cutbacks in these programs just when they are needed most. That imposes a substantial drag on our economy, and undermines state government's ability to do its job.
The Center on Budget and Policy Priorities recommends scaling back the recent, costly tax breaks for the rich. "Otherwise, the low- and middle-income families that are subject to state tax increases and service cuts will, in essence, be paying for the very generous federal tax cuts for the highest-income Americans."
President Bush's program to reform Medicare and the prescription-drug benefit seems to be pretty unpopular among senior citizens. Even if the new law is not perfect, isn't something better than nothing? Didn't AARP support it?
The problems with the new law are huge and only begin with its skimpy drug benefit. In fact, it isn't really a Medicare drug benefit, but federally subsidized private insurance. There's an outrageous coverage gap for annual drug bills between $2,250 and $5,100, now known as the "doughnut hole." Seniors will get absolutely no coverage while in the hole, despite their continued payment of a $35 monthly premium.
And there's no effective mechanism in place to hold down drug prices — a bow to pressure from the pharmaceutical industry. The new law actually prohibits Medicare from negotiating with the drug companies, deliberately ignoring the program's potent bargaining power on behalf of its 40 million beneficiaries. As a result, premiums, deductibles and co-pays — all tied to the cost of drugs — will soar.
In addition, the new law endangers employer-sponsored retiree coverage, where costs have been rising at an alarming rate. Employer subsidies in the new law are inadequate to the problem, with public and non-profit employers getting even less help than corporations. As a result, says the Congressional Budget Office, nearly 3 million retirees could lose their health benefits.
Worst of all are the so-called Medicare "reforms," which make HMOs and drug companies the big winners. Beginning in 2010, the new law authorizes a large-scale privatization demonstration that will start turning Medicare into a voucher system. Instead of Medicare's guaranteed benefits, seniors will get a voucher with a set value in order to buy health insurance on the open market.
AARP was virtually alone among senior, consumer and labor organizations in supporting the new law. Ever since, the association has been inundated with letters, calls and e-mails from angry members. Thousands have dropped their memberships because of AARP's obvious move to curry favor with the White House plus its potential conflict of interest as a sponsor of private health plans.
