Category Archives: Budget

Number Crunchola

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There’s been a lot of whoop-dee-doo in the news today about the budget deficit not being as bad as predicted. Andrew Taylor writes for the Associated Press:

President Bush touted new deficit figures Tuesday showing considerable improvement upon earlier administration predictions, saying it shows the wisdom of his tax cuts.

Bush himself announced the figures — a task that for the most part has been left to lower-ranking administration officials in the past. The new figures show the deficit for the budget year ending Sept. 30 will be $296 billion — much better than the $423 billion that Bush predicted in February and a slight improvement over 2005.

This is from President Bush’s announcement:

Here are some hard numbers: Our original projection for this year’s budget deficit was $423 billion. That was a projection. That’s what we thought was going to happen. That’s what we sent up to the Congress, here’s what we think. Today’s report from OMB tells us that this year’s deficit will actually come in at about $296 billion. (Applause.)

That’s what happens when you implement pro-growth economic policies. We faced difficult economic times. We cut the taxes on the American people because we strongly believe that the American people should lead us out of recession. Our small businesses flourished, people invested, tax revenue is up, and we’re way ahead of cutting the deficit — federal deficit in half by 2009.

As a matter of fact, we’re a year ahead of fulfilling a pledge that I told the Congress and the American people. I said to the American people, give this plan a chance to work. We worked with Congress to implement this plan. I said, we can cut the federal deficit in half by 2008 — or 2009. We’re now a full year ahead of schedule. Our policies are working, and I thank the members of Congress for standing with us.

Bush and his budget team are slackers. If they’d projected a $600 million deficit, today that deficit would be cut in half already.

Joel Havemann writes in today’s Los Angeles Times:

This will be the third year in a row that the administration put forth relatively gloomy deficit forecasts early on, only to announce months later that things had turned out better than expected. To some skeptics, it’s beginning to look like an economic version of the old “expectations” game. …

… Early in 2004, it projected a deficit of $521 billion for the fiscal year that was then 4 months old. It used that figure as the benchmark for its promise to cut the deficit in half within five years. That made its task easier: The high estimate, when reduced by reality, gave the administration a head start on its pledge.

See? I don’t know why the President is messing around with these wimpy little incremental steps.

Brad DeLong writes,

[The] Bush forecast of six months ago was deliberately high balled by $60 billion or so—precisely so that the administration could claim now that recent news on the deficit has been very good. As nonpartisan budget analyst Stan Collender wrote half a year ago, “The Bush administration held a conference call … to say that the 2006 deficit would be $400 billion or more … [This administration] has a well-established history of overstating the deficit early in the year and then taking credit when it turns out to be lower than projected, even if it has done nothing to make that happen.”

Paul Krugman has written extensively about the Bush Administration creative number crunching. For example, he wrote in July 2003:

The numbers tell the tale. In its first budget, released in April 2001, the administration projected a budget surplus of $334 billion for this year. More tellingly, in its second budget, released in February 2002 — that is, after the administration knew about the recession and Sept. 11 — it projected a deficit of only $80 billion this year, and an almost balanced budget next year. Just six months ago, it was projecting deficits of about $300 billion this year and next.

There’s no mystery about why the administration’s budget projections have borne so little resemblance to reality: realistic budget numbers would have undermined the case for tax cuts. So budget analysts were pressured to high-ball estimates of future revenues and low-ball estimates of future expenditures. Any resemblance to the way the threat from Iraq was exaggerated is no coincidence at all.

And just as some people argue that the war was justified even though it was sold on false pretenses, some say that the biggest budget deficit in history is justified even though the administration got us here with cooked numbers.

In another departure from reality, today the President credited his 2001 tax cuts for today’s budget reduction. To which Professor DeLong says,

This afternoon, the Bush administration will claim that because of its supply-side policies, the 2006 budget deficit will be about $300 billion, much lower than the $423 billion the Bush administration forecast last February. It will claim that its 2003 tax cuts have more than paid for themselves. It will claim that the tax cuts have accelerated economic growth enough to produce a net gain in revenue.

Does it think that reporters won’t ask the obvious questions—like, didn’t you guys say back in February that your forecasts already included the effects of the 2003 tax cuts on revenue? Do you really think your audience is too stupid to realize that revisions in the forecast since February come from things that have happened since February and not from things that happened three years ago? Didn’t Republicans like Dick Cheney claim that the 2001 tax cut wouldn’t create a deficit, that the 1993 tax increase wouldn’t reduce the deficit and that the 1981 tax cut wouldn’t increase the deficit? Shouldn’t people who are zero for 3 be less sure of themselves?

Finally, Professor DeLong provides another clue why righties cannot govern:

How did the Republican Party ever get into the business of claiming that tax cuts in America today don’t just expand the economy enough to make back some of the revenue lost, but expand it enough to make back all? It’s not because any group of reality-based Republican economists believed it. In his 1998 book “Principles of Economics,” Mankiw derided Ronald Reagan’s early-’80s supply-side experiment as “fad economics” peddled by “snake oil salesm[e]n … trying to sell a miracle cure.” It’s because a Republican journal of ideas called the Public Interest thought it would be a politically convenient claim to make. As its editor Irving Kristol later explained, his “own rather cavalier attitude toward the budget deficit and other monetary or fiscal problems” arose because “the task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority — so political effectiveness was the priority, not the accounting deficiencies of government.”

OK, so let’s see if I can get this straight — Kristol wanted to create a conservative majority, and to achieve this he and other movement righties pushed the not conservative (in any traditional sense of the word) notion that deficits don’t matter. In other words, the plan was to convert people to conservatism by selling them on an unconservative policy. I assume they think this conservative majority would be good for America, even if they have to wreck the economy to create the majority.

And they call us moonbats.

The Mother of all Budget Deficits

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Ron Brownstein writes at the Los Angeles Times that the biggest cause of our whopping budget deficit is not congressional pork but Bush’s tax cuts.

Maybe the most valuable earmark reform Congress could consider would be to offer more pork-barrel projects to legislators who vote against unaffordable tax cuts.

OK, that’s slightly facetious. Excessive earmarks are a real problem. But they don’t pose nearly as great a threat to the federal government’s finances as the massive tax cuts President Bush and Congress continue to enact. …

… As a strategy for reducing Washington’s huge budget deficit, fighting earmarks while promoting tax cuts is incoherent. It ignores the biggest near-term threat to the budget to concentrate on a second-tier problem. It’s like a bank security guard arresting a pickpocket in the lobby while a gang of thieves loots the vault below.

Actually, that might understate the problem. The emphasis on earmarks, unless attached to a broader program, could set back action against the real threats to the federal budget: in the short term, the cost of Bush’s tax cuts; in the long term, the rise in entitlement spending for the elderly.

Not being a whiz on any topic involving numbers and money, I looked up earmarks. According to a document on the Senate Budget Committee web site,

An earmark refers to funds set aside within an account for a specified purpose. Sometimes earmark refers to any congressional set-aside for a specified program, project, activity, institution, or location. At other times, the term more narrowly refers to set-asides for individual projects, locations, or institutions. For example, an appropriations bill including $100 million for a construction account may set aside $10 million of the construction funds for a particular project. In addition to setting aside funds, the earmark might also provide spending floors by stating that not less than $10 million must be used for the specified project.

Back to Ron Brownstein:

The focus on earmarks “throws the public off,” says Robert Bixby, executive director of the Concord Coalition, a nonpartisan fiscal watchdog group. “It distorts the nature of the problem. It is hard to get people focused on the big policy choices when they hear so much about these earmarks that they think that is the problem.”

Individual legislators slip earmarks into budgets to pay back their campaign contributors and to impress voters back home through projects like the famous Alaskan “bridge to nowhere.” A group called Citizens Against Government Waste calculates that in 1994, the last year Democrats controlled Congress, Congress approved $7.8 billion in earmarks. Under Republicans that number has risen. This year’s earmarks totaled $29 billion.

Not all earmarks are wasteful, Brownstein writes, but even if they were, “earmarks represent little more than a rounding error compared to Bush’s tax cuts or the long-term cost of entitlements.”

The Tax Policy Center, Brownstein says,

… calculated that extending all of Bush’s first-term tax cuts and adjusting the alternative minimum tax to blunt its impact on the middle class would cost about $300 billion a year over the next decade.

That means the cost of Bush’s tax agenda exceeds the cost of all earmarks, even under the most expansive definition, by about 10 to 1. The cost of Bush’s tax agenda in one year alone will exceed the total spent on earmarks, by any definition, in the past decade.

Yet Republican politicians who yell and scream about pork cheerfully support the irresponsible tax cuts. That may be the real purpose of the pork — it gives them something beside tax cuts to blame for the deficit. Crusading for earmark reform, Brownstein says, “allows politicians to suggest they are seriously confronting the deficit while supporting unaffordable tax cuts that deepen the deficit.”

Over at BOP News, Hale Stewart blogs mightily against the insanity of the Bush tax cuts. See, for example, “Republicans Give Millionaires $42,000 Tax Break” — “People who make $1 million or more in annual income get a $41,977 tax break, while people who make $50,000 — 74,999 get a whopping $110 break and $403. Wow. Color me impressed.”

Republicans still say that tax cuts, especially tax cuts for the well-to-do investor class, are growing the economy out of the deficit. To this Hale says,

First, the Republican completely ignore the 2001 tax cuts. They simply forget them. Why? Because nothing really important happened after them – the economy didn’t turn-around in a big way. Republicans also forget that interest rates were historically low during this expansion. Real interest rates – interest rates minus inflation – were negative for at least a year: lower interest rates to those levels and everyone borrows money to spend. In fact, the relationship between interest rates and GDP growth was long established as economic fact long-before the “tax cuts pay for themselves” canard became part of the Republican lexicon. The relationship is simple: lower rates, grow the economy; increase rates, slow the economy. It’s that simple.

So, the Republicans lie to get tax cuts for their big contributors. Wow – there’s something new.

In “They’re NOT Tax Cuts; They’re Tax DEFERRALS, Hale writes,

The Republican Congress recently passed an extension of Bush’s tax cut package. Here’s something the Republicans forget to tell everybody. These aren’t tax cuts. Instead they are tax deferments. Eventually, someone will have to pay for these cuts. As the Center on Budget and Policy Priorities demonstrates, lower income taxpayers will suffer the most.

First, here is a brief summary of the Republican Congress’ “fiscal responsibility.” First, they have cut taxes twice – in 2001 and 2003. The Republicans want everyone to forget about 2001 because nothing happened after those tax cuts – job growth didn’t increase, GDP growth was lackluster and tax revenues decreased for two straight years (indicating tax cuts don’t pay for themselves). In fact, tax revenue at the end of 2005 was still 6.7% below the level of tax revenue from individuals in 2001.

At the same time, the Republican’s increased discretionary spending from $649 billion to $967 billion. This created a gap between government revenues and expenditures which was filled by a 43% in government debt outstanding from $5.8 trillion to $8.3 trillion. In other words, the “fiscally responsible” party whipped out the national credit card to pay for their tax cuts, passing the cost onto the next generation (clearly violating their personal responsibility motto).

The links in Hale’s post lead to some really interesting tables. See also “The Ultimate Burden of the Tax Cuts” from the Center on Budget and Policy Priorities.

Related links: “Bankrupted by Voodoo Economics” by Jonathan Chait; “Don’t Feed the Beast” by Sebastian Mallaby and Mahablog, “The Beast That Won’t Starve.”

The Beast That Won’t Starve

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Sebastian Mallaby has questions; I have answers.

In today’s Washington Post, Mallaby points to two foundational rightie myths: (1) Tax cuts pay for themselves; and (2) Cutting taxes forces the government to cut spending. Of the first, he says, “It’s been a long time since honest believers argued that tax cuts pay for themselves.” I’m glad Mallaby added that qualifier honest, as it saves me the trouble of ranting about what planet he lives on.

Of the second, Mallaby cites a study conducted by William Niskanen, an economist who worked in the Reagan White House and now chairs the Cato Institute.

Niskanen has crunched the numbers between 1981 and 2005, testing for a relationship between tax cuts and government spending, and controlling for levels of unemployment, since these affect spending and taxes independently. Niskanen’s result punctures his own party’s dogma. Tax cuts are associated with increases in government spending. The best strategy for forcing cuts in government is actually to raise taxes.

(Mallaby doesn’t say if the study breaks down taxing and spending behavior by party. I wandered over to the Cato Institute but couldn’t find the Niskanen study online. I did, however, find a cool “white paper” called “Power Surge: The Constitutional Record of George W. Bush” that looks like a good read, but off topic for this post. You can read more about the Niskanen study in the June issue of Atlantic Monthly. Or, rather, I can read more since I’m a subscriber. Sometimes there are subscription firewalls at Atlantic Monthly, so good luck reading the article.)

Mallaby has two questions. His first question is, why would this be true? Niskanen and Mallaby speculate that cutting taxes makes legislators feel that they’ve done something to make government cheaper, so buying stuff with government money seems like a bargain. It’s like finding tube socks on sale; tube socks may not have been on your shopping list but you are compelled to toss a few into the cart because they’re such a good buy. But if you don’t exercise some restraint you might end up with a garage full of tube socks and not enough money to pay the mortgage.

Is he saying that legislators are stupid? Because that seems like, y’know, a real stupid way to run a government. Stupidity would explain a lot about Congress, certainly. But it also seems like self-deception. It’s like ordering a diet soft drink with the super-size burger and fries, or sticking to the meal plan all day long and then rewarding yourself with a big piece of cheesecake. You’re not being honest with yourself about how many calories you’re really consuming. (This is an example I can relate to, and I don’t think I am stupid. Righties will, of course, disagree.) Or maybe it’s like the alcoholic who persuades himself that just one little drink won’t matter. Or a shop-a-holic with a new credit card.

An editorial in today’s New York Times provides an example of self-deceptive spending pathology, and not just in Congress.

President Bush is trying to score unearned points for fiscal rectitude by railing against the Senate’s outsize $109 billion supplemental spending package, which includes money for the wars in Iraq and Afghanistan as well as hurricane relief. But the real scandal is Mr. Bush’s own preference for financing much of the cost of the Iraq war outside the normal budget process. That is convenient for the administration, which does not have to count the money when it is pretending to balance the budget. But Iraq is not some kind of unexpected emergency, like Hurricane Katrina. It is a highly predictable cost, now amounting to about $100 billion a year, or just under 20 percent of total military spending.

Moving the war’s financing off budget is no mere technical distinction. For one thing, it subjects the military’s spending requests to less careful Congressional committee scrutiny than they would receive during the usual budget process. More important, this fiscal sleight of hand makes it that much easier for the Pentagon to duck the hard choices it desperately needs to be making between optional and costly futuristic weapons and pressing real-world needs.

Entire libraries could be filled by the commentaries on Bush v. reality. I’m not going to add any more to that volume of literature today. I’m just saying that we seem to be electing people to Congress who exhibit dissociative thinking patterns. Maybe we should screen candidates with personality tests.

Back to Mallaby and the second question:

But the really interesting question isn’t why the starve-the-beast theory is 180 degrees wrong. It’s how Republicans will react to this finding.

Oh, that’s easy. They’ll ignore it. And if forced to acknowledge it, righties will just trot out their universal, sure-fire, one-size-fits-all rebuttal to challenges — Niskanen must be a liberal. Therefore, what Niskanen says is self-evidently false.

Bush Budget Follies

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Once again it’s time for the Bush Fantasy Budget. Here’s a roundup of commentary, starting with Eric Alterman:

You can skip “The Note” today, and almost every article written about the Bush “budget.” Typical of Bush, it’s a lie from start to finish. The Times notes “omissions include any costs for the war in Iraq after 2007, any additional reconstruction costs for New Orleans after 2006 and any plan for preventing a huge expansion in the alternative minimum tax after the end of this year,” and that’s just for starters, here. Bush has done to the country’s fiscal sanity what he’s done to Iraq’s physical infrastructure. We are talking shortfalls of trillions of dollars, all to no useful purpose. Congrats to all his enablers on all fronts, including the Washington Post’s Kool-Aid drinking Amy Goldstein who writes, with a straight-face that this phony-baloney budget is aimed “taming the deficit to satisfy conservatives, who complain that Bush has presided over a rapid expansion of federal spending.” Here. This is the kind of MSM reporting that backed up Bush on claims like “You can’t talk about Saddam Hussein without talking about Al-Qaida.”


New York Times editorial:

President Bush’s $2.77 trillion budget is fiction masquerading as fact, a governmental version of the made-up memoirs that have been denounced up and down the continent lately. The spending proposal is built around the pretense that the same House and Senate that are set to consider a record deficit of $423 billion will now impose a virtual freeze on everything other than Pentagon and homeland security outlays. The budget writers even fantasized an end to Social Security’s lump-sum death benefit — a whopping $255 per recipient — as if Congress would dare to do something so heartless and easy to exploit in an election year.

The point of all these imaginary financial projections is to give the president leeway to cement in place hundreds of billions of dollars in tax cuts the nation can ill afford and does not need. The cuts were made temporary in the first place because there was no way to even pretend that budgets could be balanced in the future with such an enormous loss of revenue.


Scot Lehigh, Boston Globe:

IF GEORGE W. BUSH had been candid when he stood in the House chamber last week to report to the nation, here’s one thing he would have said: ”My fellow Americans, we are steadily squandering our children’s future.” …

…Although they favor very different remedies, a remarkable consensus exists among fiscal experts, regardless of where they fall on the ideological spectrum, about the magnitude of our budgetary problems.

”I just came from a panel with [former OMB director] Alice Rivlin of Brookings and Bob Bixby from the Concord Coalition, and we couldn’t stop agreeing on the long-term budget danger,” Brian Riedl, chief budget analyst at the conservative Heritage Foundation, said on Friday. ”We may disagree on the solution, but among economists and think tanks, there is not much disagreement that the budget deficits within the next five, 10, or 20 years will reach levels that are practically unheard of.”


E.J. Dionne, Washington Post:

The roots of our fiscal madness, on display once again yesterday with the unveiling of President Bush’s new budget and its deficit in excess of $350 billion, were planted on Oct. 27, 1990. …

… Ever since Bush 41’s defeat in 1992, Republicans — especially Bush 43 — have committed themselves to the proposition that they will never, ever cross the tax-cutting Republican right. Taxes will be cut in good times and in bad. They will not be raised, no matter how much the government decides to spend. If preserving Republican unity requires throwing the entire cost of the war in Iraq onto the next generation, go for it. Does the Pentagon need big spending increases? Fine, but don’t even think about paying for them with new taxes.

Tax cutting is now the idol of the Republican shrine.


Jonathan Weisman, Washington Post

The president’s budget acknowledges the cost of Bush’s call to make his tax cuts permanent — $1.35 trillion over the next decade and nearly $120 billion in 2011 alone. But beyond 2007, the budget assumes no military expenditures in Iraq or Afghanistan and no effort to address the unintended effects of the alternative minimum tax, a parallel income tax system that was designed to hit the rich but has instead increasingly pinched the middle class. It also assumes Congress will cut domestic spending every year after 2007.

Those factors led Goldman Sachs economists to tell clients yesterday that the deficit forecasts are “unrealistic.” …

… “This budget is not going to happen,” said Stanley E. Collender, a federal budget analyst at Financial Dynamics Business Communications. “Of all the budgets I’ve seen recently, this is the one going nowhere the fastest.”

Hale Stewart, BOP News:

The logic here is baffling at best. Bush has continually stated he wants to half the deficit (which he created — he inherited a surplus and three consecutive balanced budgets). Yet, he continually proposes spending cuts that are disproportionate to his revenue decreases. According to the CBO, overall revenues have increased 8.16% since 2001 while overall spending has increased 32.68%. … They continually use special appropriations for Afghanistan and Iraq. As a result, the budget does not contain the cost of both campaigns. This allows the administration to play hide the ball regarding the overall cost.


Max Sawicky, TPM Cafe:

There will be many more shoes to drop regarding the Bush Administration’s budget for Fiscal Year 2007, to be released today. I want to hit a quick one. By now it is pretty widely understood that the destabilizing element in the budget in the long run is health care, which means Medicare and Medicaid. All cuts proposed today and performed thus far have completely neglected this elementary fact. Worse, the Administration substantially worsened Medicare funding by adding a drug benefit with no accompanying revenue.

Otherwise, it’s a great budget. (sarcasm off)

Rumsfeld Didn’t Advocate Invasion

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Rummy just told George Stephanopoulos on ABC’s “This Week” that he didn’t advocate the invasion of Iraq. However, he agreed with it. Now he’s denying torture; “anything that was done that was not humane has been prosecuted.” He says the President “from the outset” required humane treatment. He’s tap dancing around Bush’s threatened veto of the McCain Amendment.

I can’t stand it.

Reality Bites

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Could an epidemic of second thoughts be spreading on the Right?

If so, it’s spreading slowly. Righties are still righties, and many’s the winger who will insist he still feels fine even as flesh is consumed and internal organs are shutting down. But reality can be catching, and nobody avoids it forever.

In Salon, Joe Conason reports that some righties are grudgingly acknowleding that, maybe, um, we need some government regulation after all.

On the day that avian flu reaches these shores, even the most conservative Americans may begin to understand why effective government and global cooperation are as important as “free markets” and national sovereignty. With millions of lives at stake, they may well wish that we had spent more to bolster public health agencies at all levels — including the United Nations — instead of entertaining the simple-minded demagogy of the right for the past two decades.

Indeed, the pandemic threat is already exposing the limits of “free market” rhetoric among Washington’s right-wing think tanks, which have remarkably little to say about the subject that now preoccupies officials and experts around the world. …

…After many years of undermining global and national efforts to combat the HIV/AIDS pandemic, organs of Republican propaganda like Heritage suddenly consider public health to be a pressing concern of the federal government, right next to national defense on the list of priorities. Conservatives tend to change their attitudes quickly when their own lives and families might be endangered.

Conason reminds us that another repository of conservative “thinking,” the Cato Institute, in the pre-Katrina past called for the abolishment of FEMA — “presumably because everyone should depend on free-market solutions in case of an earthquake or hurricane” — and wanted the U.S. to stop paying dues to the U.N., thereby defunding the World Health Organization.

“The withdrawal of American participation and support from world organizations has always been a matter of principle for the Republican right,” Conason says, “although conservative ideology has yet to explain how we can close our borders to bird-borne disease.”

Details, details.

“The Cato attitude toward bird flu is much like the libertarian solution to global warming: If the ‘free market’ can’t solve the problem, let’s pretend it isn’t happening,” Conason writes. But the free market is not cooking up the stockpiles of vaccines and Tamiflu we’re likely going to need.

(Republican problem-solving amounts to denying there’s a problem until it bites their butts. Poverty, jobs, environment, health care, you name it — every time, Republicans will insist there is no problem until the crisis actually gets in their faces and threatens to hurt them in the next election. Then, of course, they will blame the problem on Democrats. On the other hand, Republicans are prone to manufacturing crises where none exist in order to enact some policy they know won’t sit well with the public.

Democrats on the whole will recognize problems shaping up down the road, although their solutions may or may not work as promised. However, I have to think back quite a while to remember a time when Democrats were in a position to enact much of anything that wasn’t compromised to death by Republicans before it became law. But if a Democratic remedy misfires, Republicans exploit the failure to expound their anti-government theories, never mind that the problem would not have evaporated had government not responded to it. )

Reality is settling over the GOP like a bad hangover. At the Washington Post, Shailagh Murray writes that some in the GOP regret they overindulged in pork when they wrote the highway bill.

The highway bill seemed like such a good idea when it sailed through Congress this summer. But now Republicans who assembled the record spending package are suffering buyer’s remorse.

The $286 billion legislation was stuffed with 6,000 pet projects for lawmakers’ districts, including what critics denounce as a $223 million “Bridge to Nowhere” that would replace a 7-minute ferry ride in a sparsely populated area of Alaska. Usually members of Congress cannot wait to rush home and brag about such bounty — a staggering number of parking lots, bus depots, bike paths and new interchanges for just about every congressional district in the country that added $24 billion to the overall cost of maintaining the nation’s highways and bridges in the coming years.

But with spiraling war and hurricane recovery costs, the pork-laden bill has become a political albatross for Republicans, who have been promising since President Bush took office to get rid of wasteful spending.

So why couldn’t they see this coming? Did the war thing just slip their minds? Did a ouija board tell them not to worry about natural disasters? Of course, part of the problem is that there used to be presidents who took the governing thing seriously and who would have refused to sign the bill. Murray continues,

President Ronald Reagan once vetoed a highway bill because it contained 152 pet projects. Despite the pork inflation, Bush had no complaints about the current package when he signed it on Aug. 10. “This bill upgrades our transportation infrastructure,” he declared. “And it accomplishes goals in a fiscally responsible way.”

Junior wouldn’t recognize fiscal responsibility if it bit his butt.

That was before Katrina devastated New Orleans and the Mississippi Gulf Coast, leaving tens of thousands homeless and requiring billions of dollars in unanticipated rebuilding costs. Trying to live within a tight budget, Republican leaders in the House and the Senate are in the process of pushing through politically difficult cuts in Medicaid, Medicare, food stamps, farm subsidies and student loans.

Making sure the poor and disadvantaged make all the sacrifices–that’s the Republican way. And since entrenched poverty so excacerbated the damage of Katrina, it’s so sensible to make the problems of poverty even more intractable. The Guardian observes,

If the budget cuts passed by the US senate on Thursday are anything to go by, the whole thing will end in tears. Republicans – disgracefully – targeted most of the cuts on the elderly and the poor through restructuring (ie cutting) some Medicare and Medicaid programmes. Worst of all, part of the cuts originally aimed (creditably) at cutting America’s ludicrously high agriculture subsidies was amended so the brunt would be taken by chopping $844m from food stamps for the poor rather than from farm subsidies. Meanwhile, Republicans are hoping to pass yet more tax cuts for the wealthy. An administration that can tackle a serious budget problem in this way deserves all that may be coming to it.

The Republicans may hope to pass yet more tax cuts for the wealthy, but there are signs the soak-the-poor crowd may be losing their edge there, too. Robert Kuttner writes in the Boston Globe,

AFTER HIS reelection, President Bush set two top domestic priorities — privatization of Social Security, and ”reform” of the tax system. Privatization ran into a wall of opposition once the public grasped that the price would be a big cut in guaranteed retirement checks.

On Tuesday, Bush’s blue-ribbon commission on tax reform issued its recommendations, and they are hitting with a similar, resounding thud. The political right wanted a flat tax, a consumption tax, or a national sales or value-added tax in place of the progressive income tax. Not only did the commission fail to support any of these, but it took on one sacred cow — capping the mortgage interest deduction that would raise taxes on the upper middle class. … it was far from what the drown-the-government crowd wanted, and one more sign that Bush is losing control of the agenda.

Damn those economists. They actually check their math.

And here’s the biggest jaw-dropper of the day: Jim VandeHei writes in WaPo that

President Bush has ordered White House staff to attend mandatory briefings beginning next week on ethical behavior and the handling of classified material after the indictment last week of a senior administration official in the CIA leak probe.

Bush? Ethics? The Apocalypse is at hand, I tell you …