March 8, 2001

For many years, the Brookings Institute published a book following the release of the federal budget beginning with the works, Setting the Nation’s Priorities. What are the priorities President Bush is setting by the budget he has just sent to Congress.

First, President Bush believes we should be able to eliminate the pork barrel spending that regularly occurs before the end of a Congressional session. One hopes that he will be successful. Many of these projects cannot pass normal budgeting scrutiny but pass because members of Congress, from both parties, “scratch each other’s back” to show they have delivered for their constituents.

I hope Bush will be successful in ending this practice. But as a forecaster who needs to deal with most likely outcomes, I do not believe he will succeed here.

Second, the President is willing to advance initiatives in education and health to improve research or encourage the local development of accountability. Dealing with fundamental issues, such as research, and then allow the private sector to benefit from those results may be an appropriate role for government. As economists suggest, the gains are global while the costs are local. Normally, such conditions lead to under use in a private economy.

Unfortunately, general science is not receiving the same consideration. The National Science Foundation budget is being slashed and even space exploration (probably our nation’s pyramid building) is being restrained.

Also, no initiative to improve election processes was contained in the budget. Apparently, the President either is satisfied with the current election process (it certainly did not hurt him) or he believes that this local responsibility, unlike the accountability in education, can be done locally in a timely fashion without federal support.

Third, the President believes the federal government should invest in resources over which they have control. For example, he has a large program to improve the infrastructure of the national parks. The infrastructure of the nation’s highways, bridges, ports and airways, however, initially received no attention. Only after major criticism did the President decide not to cut the FAA budget. At the same time, more federal prisons are being constructed.

The military is being improved through additional wage increases, but this is dictated by the incredibly poor recruiting performance by all military other than the Marines in recent years. If you cannot get the resources at current rates, you either must lower the quality of the resources you get or raise the rates you pay for them. At least President Bush is responding to that basic economic principle. President Clinton did not.

However, the refurbishing of military equipment is being delayed until a commission studies the needs and mission responsibilities of the military. It is possible that some new initiatives may be financed through eliminating deployment of the next generation of weapons while newer weapons systems have their development accelerated. There clearly is a need for more military equipment. Waiting for a plan shows responsibility in managing those resources.

When the additional education and health initiatives as well as the higher pay for the military and investment in national parks is offset by lower spending for other research, reduced support for most housing programs, and the elimination of pork barrel spending, government spending is still up 4 percent from the previous year. This is stronger than inflation, although it is less than the spendthrift pork programs in last year’s 6 percent gain.

Liberals have been upset by the absence of new initiatives on prescription drugs, programs for the elderly, and other “needs.” Except for the 42 million people without health insurance, all the liberal programs are for the elderly. Moreover, they are additional open ended programs that could balloon in the next decade.

By contrast, there are no new initiatives that will really balloon. Educational accountability has a goal, not an open ended mandate. National parks need upgrading, but this is a periodic, not continuous, spending initiative.

Thus, the President’s program is one of attacking specific problems that can be completed rather than opening the flood gates for unknown liabilities in the future. Also, guidance will be provided to local governments, but the federal government will not take over local responsibilities.

There is merit in the process followed by the President. However, there are oversights that remain puzzling. Could the President really believe that further restraint on federal aviation was in the national interest, especially as the government already has collected the landing fees but is not solving the controller equipment problem?

Perhaps the restraint evident in the budget is needed. How many programs have continued without clear evidence that they are resolving the issues they were designed to address? Nevertheless, an obvious set of spending principles is difficult to discern from Bush’s budget initiatives.


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