The Bush administration and the Republican Party seem to have lost all
capacity for financial self-control, turning their backs on the GOP's
historical record of responsible fiscal management. The Republicans have
squandered the huge budget surplus they inherited by spending not just
on guns and butter but on guns, butter, and tax cuts. Because of
government obfuscation, most Americans don't realize the deep fiscal
hole we're in--and the fact that we're still busy digging. As David
Walker, the head of the nonpartisan Government Accountability Office,
pointed out, "The federal government's obligations, current liabilities,
and unfunded fiscal commitments are over $43 trillion and rising. . . .
Yes, that's trillions with 12 zeros rather than billions with nine zeros."

The estimated net worth of American families is slightly over $47
trillion, and nearly all of it--90 per-cent--would be needed to cover
government's current obligations. And don't think we can grow our way
out of this hole. According to the GAO, it would take real double-digit
growth over the next 75 years to pay off our current debt--an impossible
task, considering that the growth rate during the 1990s boom years
averaged just 3.2 percent.

A trillion here, a trillion there. The hole is even deeper because these
debt projections exclude the cost of Bush's second-term agenda, which
would add over $5 trillion to the deficit over the next decade by making
his tax cuts permanent ($1 trillion) and privatizing Social Security
($1.5 trillion in the first decade; $3.5 trillion in the second)--not to
mention the tens of billions of dollars likely to be spent on military
operations. And all this spending would come at a time when the first
baby boomers are on the verge of retiring, causing Medicare and Social
Security costs to soar. The president says his budget would cut the
deficit in half by 2009. But this is a mirage. Why? Because it excludes
the cost of the Iraq war and the cost of his privatization program for
Social Security--to name just two whoppers.

What's worse, by cutting on the other side of the ledger, the Bush
budget would slash or eliminate programs that affect the quality of life
of millions of Americans. Among the proposed cuts: a 12 percent
reduction in elementary and secondary education programs; a 14 percent
drop in spending on Medicaid, the federal-state program for the poor and
disabled; a 20 percent cut for clean water and clean air. Spending on
Head Start would be slashed by $3.3 billion, meaning 118,000 fewer kids
would be covered by 2010, while the program that subsidizes nutritional
assistance to low-income pregnant women and nursing mothers, critical to
preventing low-weight babies, would have to reduce the number of women
covered by 740,000. At the same time, however, the Bush budget would
increase highway spending--the budget's single biggest pork-barrel
program--by $284 billion over six years from the current $218 billion.
The egregious farm-subsidy program, meanwhile, which benefits huge
agribusinesses far more than it helps small family farms, would hardly
be touched.

But wait, it gets worse. The real cost of the president's program soars
after he leaves office, especially the new prescription-drug program,
which has already jumped from $400 billion to an estimated $724 billion
in the first decade, as costs increase from $37 billion a year to $110
billion a year. This is just one of many programs whose escalating costs
will leave Bush's successors in a vicious budget crunch. Making matters
still worse is the fact that reforms of major entitlement programs like
Medicare and Social Security are essentially not being addressed. If
that remains the case, fiscal catastrophe will be virtually unavoidable.

What's to be done?

We must insist on truth and transparency, and our leaders must tell us
clearly the current-value dollar cost of all major spending and tax
bills before they are voted upon. We must also bring back basic
budgetary controls, such as pay-go rules, that require new spending
increases or tax cuts to be paid for by corresponding tax increases or
spending cuts. We will need to revise our tax code and then improve our
efforts to enforce it so as to collect hundreds of billions of dollars
of revenue lost to special tax preferences, in uncollected back taxes,
and through tax evasion and abusive tax shelters. Finally, we must bring
our health costs under control before they break the nation's fiscal
bank. The sooner we act the better. Otherwise, compound interest on the
growing debt will eat us up.

The American public gets it. In a recent poll, *90* percent called the
deficit a very serious or somewhat serious problem. Which raises a
rather interesting question: Where are all those budget hawks when we
really need them?

By Mortimer B. Zuckerman US News & World Report.