Global Policy Forum

President Bush proudly declared Monday that his $2.57 trillion budget "sets priorities." If so, his first priority appears to be to ignore the growing federal deficit. The spending blueprint released by the Bush administration includes a record $427 billion deficit -- and there is every reason to believe the flow of red ink will be much worse than that.

After all, the budget left out future costs for the postwar military operations in Iraq and Afghanistan. It also does not include any funding to cover the diversion of Social Security payroll taxes into privately controlled accounts -- the controversial initiative that Bush had listed as a second- term priority during his State of the Union address last week.

There is a great paradox in the president's stated concern for the solvency of Social Security and his budget's plan to borrow $170 billion from its trust fund to help build his fiscal 2006 budget. "I find this form of budget balancing deeply troubling," Sen. Dianne Feinstein, D-Calif., said in a statement released by her office. "If these funds were left in the trust fund, they would go a long way toward helping preserve the program for seniors."

One of the reasons that Bush is forced to tap the Social Security trust fund and conceal the full costs of Iraq and Afghanistan is that his dogged refusal to consider repeal of his tax cuts has severely limited his revenue options. Congressional Budget Office data suggest that tax cuts enacted since 2001 account for almost half of the deficit increases in recent years.

So what is the Bush administration's response to concerns about the deficit-fueling tax cuts? This budget proposes to make them permanent, at a cost of $1.9 trillion to the federal treasury over the next decade. At the same time, the Bush budget proposes significant cuts in domestic programs such as health care, education, food stamps, job training, environmental protection, community policing, Amtrak subsidies and first responders. But even those cuts won't add up to a balanced budget. Bush's budget shows, once again, that the president who once campaigned as a "compassionate conservative" is proving to be neither.

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