The wealth transfer scheme

Geov Parrish -

02.18.05 - Everyone saw this one coming. But that doesn't make it any better.

President Bush's FY 2006 budget proposal, unveiled in detail last week, is the other shoe dropping.

It's not quite fair to say that this is a budget designed to reduce the deficit. There's still plenty of expansive spending; the Pentagon's budget increases again in this cycle, and pork for favored Republican projects still abounds.

But what it does do is use the deficit, created in four short years by this administration, as an excuse for targeting all the programs Republicans don't like. The Department of Education -- which Republicans once wanted to abolish -- takes a $4.3 billion hit. Money for health care, $1.7 billion in reduced or eliminated programs. $2.5 billion in agriculture. Half a billion in federal housing expenditures. Even aid to local and state law enforcement gets a $1.5 billion reduction. Regulatory agencies from the EPA to the Forest Service will have to make do with less.

Here in the Northwest, the effects will be profound. Congressional delegations are up in arms over a proposal to charge users of the federal Bonneville Power Adaministration market rates for power, rather than the low subsidized rates utility customers currently pay -- effectively an enormous tax increase for the BPA's four-state service area. Federal money for Hanford cleanup is cut. Money for the Puget Sound's pressing transportation needs? Forget about it. And so it goes, for local governments around the country.

More honest conservatives, like Grover Norquist or the Wall Street Journal's editorial page editors, are jubilant over the Bush approach. Bush has used enormous tax cuts, primarily directed toward the wealthy, an expanded federal bureaucracy, largely devoted to corporate welfare, and the costs of post-9-11 militarism, primarily benefiting Halliburton, Lockheed Martin, and other military contractors, to drive up the federal deficit. He is then trying to alleviate that deficit by reducing programs that don't primarily benefit the wealthy: education, health care, housing, environmental protection.

Bush's budget is just as telling for what it omits. Costs of the wars in Iraq and Afghanistan -- let alone any prospective wars in Iran or Syria or North Korea -- aren't included. Neither are the massive transition costs attached to Bush's plan for partial privatization of Social Security.

In both cases, when the feds spend money, it winds up in very deep pockets -- the military contractors in Iraq and Afghanistan, banks and Wall Street for Social Security.

Follow the money. This is not fiscal prudence; it is a massive wealth transfer scheme, an effort to use the power of federal spending to benefit the economic elites who are George W. Bush's core constituency. This is the thank-you for the hundreds of millions poured into Bush's re-election campaign.

What would fiscal prudence look like? Consider Iraq, where $9 billion slated for Iraqi reconstruction vanished into thin air, and $20 billion remains unaccounted for by Coalition Provisional Authority audits. Consider the allegations of price gouging and corruption that have been dogging Halliburton and all the other various contractors and subcontractors employed by a steadily privatizing military effort. There has been virtually no call, either from Bush or his Republican allies in Congress, to rein in the wasteful spending there.

And that's just Iraq -- it doesn't take into account all the usual rounds of Pentagon pork, the weapons systems nobody needs, manufactured in the districts of key Congressional allies.

That's where the excess money is going -- not to school kids, welfare queens, or grizzly bears. Or to states and local governments, most of which are facing their own budget crises.

The good news, if it can be called that, is that some of Bush's cuts are not likely to withstand the congressional process. Historically, Congress always adds more pork to the president's budget requests, regardless of which party is in charge. And most easy cuts in social programs have already been made in past years; there's not much left that doesn't have at least some vocal congressional constituency.

The net result is that some of these programs can be salvaged -- if people speak up. But it doesn't change the overall dynamic of wealth transfer: massive government spending that overwhelmingly benefits the wealthy, who in turn are paying less and less of the actual burden of financing government.

That dynamic is likely to stay with us for he next three budgets. One can only hope that voters remember whose interests Republicans are fighting for -- and whose they're not -- come election time.

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