Dubya's Fiscal Swan Song

Here's a nutty idea. Let's start by cutting back on what the federal government spends on education -- and the environment and health research, too.

And let's not forget to trim back federal aid for firefighters and other first responders. Or federal help for seniors facing huge spikes in home heating bills. Let's cut all this federal spending -- by $15 billion or so. Then let's take this $15 billion and give every dollar to taxpayers who make over $1 million a year. Wait, that's not nutty enough. Let's take that $15 billion, triple it, and only then give it to millionaires.

We clearly have the makings here for a truly great comedy sketch on Saturday Night Live. But the SNL crew, to really maximize the guffaws, might want to make all this even more ridiculous -- by choosing, for instance, to keep those giveaways to millionaires going for the next ten years, with each year's giveaway larger than the year before's.

Now that would be nutty. That would also be exactly what President George W. Bush proposed last week in his latest -- and last -- federal budget submission to Congress. "It's a good budget," the President told the nation last week.

It's actually insane. This new Bush budget, to keep tax cuts flowing to America's wealthy, rips into federal programs that average Americans support -- and need. America's wealthy certainly don't need any more help. But they get plenty of it in the President's new budget. In the 2009 federal fiscal year, taxpayers who make over $1 million will save a whopping $51 billion, thanks to the Bush tax cuts originally enacted in 2001 and 2003. These over-$1 million households, notes the Center for Budget and Policy Priorities in a new analysis, make up just 0.3 percent of the U.S. population. In 2009, under current tax law, these deep pockets will see more in Bush tax cut savings -- $12 billion more -- than the entire bottom 60 percent of the U.S. income distribution, those households that make $50,000 a year or less.

All the Bush tax cuts for the financially fortunate will fade out completely after 2010, unless Congress consciously chooses to extend them. President Bush, not surprisingly, is pressing to win this legislative imprimatur on his "legacy." If he gets it, notes Center for Budget and Policy Priorities analyst Aviva Aron-Dine, the payoff for America's richest will be staggering. The nation's most affluent 1 percent -- households currently making over $450,000 a year -- would realize $1.1 trillion in tax savings over the next decade, if the Bush tax rates remain in effect, over $180 billion more in tax savings than the savings that would go to America's entire bottom 80 percent combined.

The ultimate insanity? This $1.1 trillion would come on top of the near $500 billion the Bush tax cuts have, over the last seven years, already saved the nation's top 1 percent.