The Blue State

Our latest nuclear warhead

The Pentagon is spending $119 million over the next fiscal year on this new nuclear device.  They consider a much safer warhead -- whatever that is supposed to mean!

The new weapons program, which has received cautious support fromCongress, was immediately criticized by some nuclear nonproliferationgroups as a signal that the government wants to expand nuclear weaponsproduction — not move toward eliminating the stockpile. Critics alsomaintain that it sends the wrong signal around the world by pushing anew warhead — although characterized as a replacement for existingones— at a time the United States is trying to curtail nuclear weaponsdevelopment in North Korea and Iran.

Now newspapers all over the world, such as the International Herald Tribune, are pointing out this ethical hypocrisy.  You can't be for non-proliferation, and then turn around and engage in proliferation of your own.  That is not how you build trust and restore America's reputation as a responsible world superpower.  That part should at least be obvious.

Bunker-busters are more exciting than food stamps

The Center on Budget and Policy Priorities, which has has been skimming the 2008 Bush budget proposals, came across a hidden provision that would cut the food stamp program by $1.2 billion over ten years.  This means about 300,000 Americans would be cut from the program:

The President’s budget includes a provisionthat would cut the Food Stamp Program by $540 million over the nextfive years (and by $1.2 billion over ten years) by taking more than300,000 low-income people off the program in an average month.  The Administration would achieve thesesavings by stripping states of flexibility provided in the 1996 welfarelaw that allows states to coordinate certain aspects of eligibility forthe Food Stamp Program with eligibility rules used for state TANFprograms.

Priorities, priorities, priorities!  The Administration would rather have a 12% increase ($623 billion total) in the 2008 Pentagon budget than make sure the elderly, disabled and many single parents have a food stamp program that is fully funded for a fraction of the cost.

Bush's stealth toys

At the moment, I don't have time to read all of the Pentagon's requested '08 budget.  So this weekend I will go through it and report back on this site.  For now, I can only go by what is written by other people.

For all the money that we will pay on the war in 2008, it is interesting that President Bush selects this exact budget to fork out billions of dollars on new stealth fighters -- some of which we do not even need at the moment.  Slate broke it down:

The budget includes $4.6 billion to buy 20 F-22 Raptor fighterplanes and $6.1 billion to buy 12 F-35 Joint Strike Fighters. Both are"stealth" planes, meaning they are contoured in a way to deflect (orminimize the reflection from) anti-air radars—thus making them if notentirely invisible, then extremely difficult to shoot down. The F-22has a limited ability to hit targets on the ground, but it was designedmainly to shoot down enemy fighter planes from far distances. The F-35is mainly a ground-attack plane.

The Pentagon plans to buy 177 F-22s  at a total cost of more than $65 billion (measured in real 2005 dollars).  Plans for the F-35  are a bit shakier, but they hover around 2,500 aircraft costing more than $100 billion.

Why are we spending $4.2 billion on a plane that shoots down other enemy aircraft?  We already have a huge comparative advantage on every other airforce.  It is nearly impossible for any airforce in the world, including China and Russia, to shoot down some of our already-existing non-stealth planes.

Here is an idea: how about we wait until ten years from now and decide to build them if China and Russia are more of an air threat?  Otherwise, what is going to end up happening is on top of the billions we will fork out for the F-22 in 2008, we will have to pay even more money for a newer version once more advanced technology comes out in a decade.

Three words: military industrial complex.

Bush to cut education once again

Just as President Bush proposed last year, he will cut a number of education programs in 2008.  In all, education would receive an 8% cut -- more than $4.9 billion in program reductions.

So what in education would be cut?  Among the most notable, Bush wants to reduce subsidies for financial institutions that lend money to students.  Stocks like Sallie Mae fell sharply today as a result.  One analyst put it bluntly:

The administration "may be doing the equivalent ofthrowing the student loan industry under the bus.''

However, the Pentagon budget will increase by 62% this year.  Maybe Dwight Eisenhower had every reason to be worried about the size and scope of the military industrial complex.  It prevents us from making the education of our youth the number one priority.

A surplus in 2012? Depends on which projection you use

Last week the White House touted to the news media its new budget projection that forecasts a surplus by the year 2012 -- that is if Congress enacts exactly the same budget proposals that President Bush wants.  Of course, we have been through this before.  Bush explains the situation and Congress follows in lockstep, only to find that what was promised did not work out the way everyone thought.  This has happened with Iraq, health care costs and yes, the deficit.  So maybe this time it might be prudent to compare what the White House promises to a non-partisan projection.

Thankfully, with the release of the non-partisan Congressional Budget Office's latest deficit analysis, we now have the opportunity to compare the White House data with another projection.  The results are in.  If the tax cuts were to be extended beyond 2010, the year they are set to expire, the CBO and the White House are worlds apart in their deficit estimates for 2012:

• White House 2012 Estimate: $61 Billion Surplus
• CBO 2012 Estimate: $146 Billion Deficit

So who are you going to believe?  Again, we have been through this before.

Even more fascinating is the CBO's other conclusion: if the tax cuts are not renewed in 2010, we will have a $170 billion surplus in 2012.

Maxing out the credit card on Iraq

The Christian Science Monitor really had an excellent article about how the U.S. Treasury pays for this war.  In 2005 and 2006, the expenditures for this war did not even appear on the official budget.  So how is it being paid for?  The CSM has the answer:

But to pay for the ongoing wars in Iraq and Afghanistan, the US hasused its credit card, counting on the Chinese and other foreign buyersof its debt to pay the bills.

Now, as President Bush is promising to boost the number of troops inIraq, there is increased scrutiny over how the US is going to pay forit all.

The US is spending about $10 billion a month on Iraq andAfghanistan. By the end of this year, the total funds appropriated willbe nearly $600 billion – approaching the amount spent on the Vietnam orKorean wars, when adjusted for inflation.

President Bush took us into Iraq because he felt (and remember that "feeling is different than "thinking") that it would benefit U.S. national security.  Now, he is escalating the war by 20,000 more forces because of that very same feeling.  But is it in the interest of U.S. national security to owe half-trillion dollars to banks in China and other undemocratic regimes?  Remember, we have to pay interest on that debt.  Also remember that debt decreases the value of currency.

So the next time Congress appropriates another $150 billion or so for Iraq, please remind your elected officials that our grandkids' generation will have a substantially devalued currency unless we can pay for what we spend on this war.

Treasury Dept brags about $80 billion increase in debt

This week, the Treasury Department happily announced that the deficit in the latter fourth of 2006 reached $80.4 billion.  So how is that positive?  It was the lowest deficit of any 4th quarter in four years -- certainly a step in the right direction.  Newspapers all over the country jumped on the story, as if it was a sign that our budgetary situation was beginning to turn the corner.

But is a $80.4 billion deficit for a quarter of the year anything to cheer about?  The last time it was any lower was in 2003, during an actual recession.  Translation: our deficit has risen during a time of economic prosperity, when inflation has gone up.  What all this means is a lot of the prosperity was artificial, and the debt could increase in the near future.  When debt increases, so do interest rates and so does our dependence on foreign banks in non-democracies such as China.

In fact, the non-partisan Congressional Budget Office (CBO) is predicting the debt to increase this year.  They forecast a 2007 deficit of $286 billion, larger than in 2006.  The House Democrats' new spending rule, titled "Pay as You Go," is a healthy step in the right direction to control spending.  But in order to minimize the deficit in the coming year, more money may have to be cut from entitlements.

The Democratic Congress will need to be careful what it spends taxpayer money on over the next two years.  Young Americans will eventually have to be the ones paying interest on this debt, and they keep that in mind when heading to the polls each election cycle.  As a young American, I speak from experience.

What's another $70 billion here and there?

I am sure all of you will be so shocked and surprised to find out that the Bush Administration understated war costs for the 2007 fiscal year.  I mean, to quote Donald Rumsfeld, "golly gee", you probably never thought that would happen.  Originally, they put military costs for 2007 at $110 billion.  Now it turns out they will need around $170 billion instead:

Office of Management and Budget Director Rob Portman said there was nofirm estimate of the costs for fiscal 2007, which began Oct. 1. When hewas asked if the $110 billion estimate was now too low, Portman said,"Yes."

I mean, gee, "Henny penny the sky is falling!" 

Democrats in both the House and the Senate are promising that it will face scrutiny:

A number of lawmakers, including Sen. KentConrad, D-N.D., and Rep. Jim Cooper, D-Tenn., have said they expect thesupplemental request to exceed $100 billion, putting the total cost forthe year at more than $170 billion.

"We'll review it and scrutinize it veryclosely," Rep. Ike Skelton, D-Mo., the incoming chairman of the HouseArmed Services Committee said at a news conference Tuesday of thesupplemental request.

This whole ordeal reminds me of a child who tells his mother that a toy will cost "X" dollars, even though it really might be more.  The child informs his mother of the lower cost so that she will be more likely to buy it.  Only, when they show up at the store, the toy turns out to be 70% more expensive than the child said.  The mother then feels obligated to buy it in fear of being asked, "Do you really love me?" 

Except, in the example of war funds, the Democrats are afraid of being asked, "Are you not patriotic or something?"

2006 deficit 81% higher than originally thought

After he was reelected as president in 2004, George W. Bush laid out a plan that he said would cut the federal deficit in half by 2008.  However, a new report released by the Treasury Department shows that the deficit is actually larger than expected, making Bush's goal even more unrealistic:

The federal deficit for 2006 would have been 81 percent higher than the$247.7 billion that was reported two months ago if thegovernment had to use the same accounting methods as private companies.

The report, released by the Treasury Department and the president'sOffice of Management and Budget, found that under the accrual method ofaccounting, the deficit for 2006 would have totaled $449.5 billion, not the widely reported $247.7 billion incurred under the cash system of accounting.

Under the accrual method, expenses are recorded when they areincurred rather than when they are paid. That tends to raise costs forliabilities such as pensions and health insurance.

Ten years ago, Congress ordered the government to start issuingannual reports using the accrual method of accounting in an effort toshow the finances in a way that was comparable with the private sector.

Until now, the trick has been to use any method possible that makes the deficit look less than what it really is.  And when that doesn't work, then just don't include certain expenditures, such as the Iraq war, in the budget.

Budget priorities have not been, well, a priority

Just in case you are wondering what kind of an impact the Republican-occupied Legislative and Executive branches have had on our National Debt, a study by the Center on Budget and Policy Priorities finds that the effect has been significant.  Between 2001 and 2006, GOP spending has raised the National Debt by almost $2.3 trillion.  It turns out that 51% of the debt was due to the Bush tax cuts -- which means that almost 20% of all the debt over the last six years came as a result of tax cuts for the richest 1% (since 1/3 of all the Bush tax cuts go to the top-1%). 

So, our children and grandchildren will face sky-rocketing interest rates, all because President Bush wanted Paris Hilton to get a tax break every single year.

This is just one of the many studies on the CBPP web site.

TABLE 1 Effect on the debt of legislation enacted over the last six years
	In 2006	Cumulative 2001-2006
	billions	billions	% of total
Tax cuts	$252	$1,159	51%
Defense, international and homeland security, incl. wars in Iraq and Afghanistan	238	767	33%
Entitlements, incl. flood insurance	75	229	10%
Domestic discretionary programs, incl. Katrina relief	68	139	6%
Total	633	2,294	100%
* All amounts include both direct costs and the resulting increases in interest on the debt.