The President's Fiscal Year 2006 Budget

So, President Bush has submitted his budget for the 2006 fiscal year of the United States Government. Congress will now hem, haw, hack, and cough up the money for another year of “the Feds.”

So, what's in this 2.57 trillion dollar beast? This is a 3.6% increase over the last fiscal year.

We start with tough talk about restraint from the Press Briefing for the release of the budget:

Because of this increased spending restraint, deficits are below what they otherwise would have been. In order to sustain our economic expansion, we must exercise even greater spending restraint than in the past. When the federal government focuses on its priorities and limits the resources it takes from the private sector, the result is a stronger, more productive economy. The President's budget proposes that enhanced restraint.

How much of that is true? The Wall Street Journal reporter Shailagh Murray says,

Fiscal conservatives will find the most to like in Mr. Bush's plan. While administration documents describe the cut in non-defense, non-homeland security domestic discretionary spending as a 1% reduction, the real cut is about 2% when the numbers are adjusted to take out foreign aid.

Seems reasonable. Again, how much of this is true. Chris Edwards and Alan Reynolds Op Ed in the Wall Street Journal is less rosy:

At first glance the budget sounds pretty tough this year, with a promise to cut or terminate 150 federal programs. But even if Congress passed all those cuts, 2006 spending would be reduced by less than 1%. Last year's budget likewise proposed terminating 65 programs, but only five were actually ended.

Let's look at the technology side of the fence, one of my interests. ZDnet's Russel Shaw highlights four measures in the budget that got his attention. The patent and trade office gets a 10% increase. The National Institute of Standards and Technology (NIST) gets a 7.5% increase. The Federal Communications Commission (FCC) gets a 6.5% increase. Finally, the National Science Foundation (NSF) would get a 2.7% increase. Seems to me like a decent focus on infrastructure although a barely ticking promotion of basic scientific research. It's my hope is that this will spur businesses to get more involved in basic R&D.

It's been said that the good thing about this budget is that with deficit spending there's far more pressure to cut bad programs and trim fat budgets. While this is a decent approach to keeping the legislature under control, it does nothing to save us from a tax-and-spend executive taking the reins in four years.

Democrats are already howling. On some issues they are right to complain. This budget holds aside the issues of changing the Alternative Minimum Tax (AMT) which is not inflation-adjusted and is therefore affecting more individuals and businesses each year. The other is the costs of changing the Social Security System.

I'll keep an eye out on what Congress changes. More later…

Josh Poulson

Posted Tuesday, Feb 8 2005 12:40 PM

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