News & Politics

Bush's Middle Class Tax Hike

In the 2006 budget, rolling back massive tax cuts for millionaires is off the table, but the Bush administration has no qualms about raising taxes on average Americans.
A closer look at the administration's 2006 budget shows an economic agenda promoting the wrong choices and wrong priorities. Rolling back massive tax cuts for millionaires is off the table, but the Bush administration has no qualms about raising taxes on average Americans. The budget President Bush submitted to Congress yesterday imposes $5.3 billion in new, regressive taxes. (They are conveniently listed in table 18-3 on page 305 of the Analytic Perspectives supplement to the budget.) The administration's budget contains new taxes that will increase the price of a six-pack of beer, an airline ticket and prescription drugs for veterans. Meanwhile, the budget cuts funding for education, public health and environmental protection and includes $1.4 trillion in new tax cuts for the wealthy. Welcome to Bushonomics. (Sound off on the president's middle-class tax hike on

No matter which way you slice it, the administration's budget is egregiously fiscally irresponsible – by its own estimates, it will result in a $390 billion deficit in 2006. Worse, that figure is only arrived at through trickery. The budget includes over a billion dollars in revenue from drilling in the Arctic National Wildlife Refuge (ANWR), even though Congress hasn't authorized such drilling and has rejected President Bush's proposal to open ANWR to oil exploration for the last four years. Budget Director Josh Bolten defended the move, claiming, "the budget is the right place to present the entirety of the president's policies, so all of his proposals are reflected in there." Really? The Bush budget excludes all funding for operations in Iraq and Afghanistan and the administration's $2 trillion Social Security package.

During the Bush administration, more and more Americans are struggling. The Center on Budget and Policy Priorities sums it up: "The number of poor went up for the third straight year in 2003, the share of total income that goes to the bottom two-fifths of households has fallen to one of its lowest levels since the end of World War II, and the number of people lacking health insurance rose to 45 million in 2003, the highest level on record." Yet the Bush administration is cutting programs that help people get back on their feet. For example, the administration's budget proposes "a five-year freeze on child care funding that ... will result in cutting the number of low-income children receiving child care assistance by 300,000 in 2009." The Bush budget also cuts $45 billion from Medicaid, the program that provides basic health coverage to the poor.

The industry-backed prescription drug bill President Bush jammed through Congress is a bad law that keeps getting worse. While the bill was pending before Congress, the administration promised the bill would cost $400 billion over 10 years and threatened to fire the Medicare actuary who knew that figure was too low. Later, the administration revised its estimated price tag to $534 billion over 10 years, largely due to excessive payments to private insurers and HMOs. Now, in the most recent budget, the Bush administration estimates the bill will cost $395 billion over five years. In the meantime, drug companies have already jacked up their prices enough to offset any discount to seniors.

Apparently, President Bush isn't concerned that abstinence-only programs are misleading the nation's children about sex. A study last year found that some of the most popular programs pushed lies, such as claiming that mutual masturbation can cause pregnancy and condoms fail to prevent the transmission of HIV 31 percent of the time. President Bush's budget increases funding for abstinence-only education by $39 million, to a total of $209 million.

Good news for Evian, bad news for everyone else. President Bush proposes reducing federal funds states use to improve water quality by $369 million. The federal contribution to the program is now just $730 million, down from $1.98 billion four years ago.
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