State of the Union Must Square With Fiscal Reality

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today urged President Bush to make fiscal responsibility the centerpiece of his 2005 State of the Union address.  With a record $427 billion deficit projected for fiscal 2005, essential goals such as tax reform, Social Security reform, making the tax cuts permanent, and cutting the deficit in half by 2009 will be far more difficult to achieve if the President does not demonstrate the resolve to cut or eliminate wasteful and unnecessary government programs.  Overall discretionary spending rose 10 percent from 2002 to 2004; the national debt stands at $7.6 trillion; and unfunded liabilities for Medicare and Social Security total $72 trillion. 

“The deficit can no longer be blamed on the 2001 recession or 9/11,” CAGW President Tom Schatz said.  “Congress must make hard choices to cut spending.  President Bush can make those choices easier by highlighting programs fraught with waste, fraud, and abuse.”

The fiscal 2005 budget held non-defense, non-homeland security spending to a one percent increase in funding.  Last year, President Bush targeted 13 poorly-performing programs for elimination; Congress continued funding for all but one.  In his fiscal 2006 budget request, due February 7, the President could request funding cuts for up to half of all non-defense discretionary programs.  By emphasizing the need to reduce government waste, the President can spend some of his political capital before Congress wastes more of taxpayers’ money.   

Defense Spending.  The Pentagon has indicated that it could cut $10 billion from the budgets of various weapons systems, including:  the C130J cargo aircraft; DDX destroyers; Virginia-class submarines; and the LPD-17 San Antonio class amphibious ship.  However, cuts in budget authority take years to translate to reductions in actual outlays.  CAGW has long championed the above cuts as part of a larger plan to achieve $12.9 billion in one-year savings, including:  Eliminating excess Pentagon infrastructure ($2 billion); privatizing DOD commissaries ($230 million); reducing purchases of the F/A-18E fighter ($165 million); and freezing funding for military space programs ($69 million).  None of these cuts would endanger troops in the field. 

Health Care.  President Bush can correct the most damaging aspect of the Medicare prescription drug bill by restricting the benefit only to those who need it.  The benefit is projected to cost $534 billion over five years, one-third more than the original cost estimate.  Seventy-six percent of seniors already have drug coverage through existing health plans.  Medicare is one of the most wasteful federal programs, making $27.1 billion in improper payments in fiscal 2004. 

Department of Housing and Urban Development (HUD).  President Bush has proposed eliminating or consolidating duplicative and ineffective programs in HUD’s $8 billion community development branch by scrapping dozens of economic development projects and a rural housing program.  This is excellent news for taxpayers; CAGW has for years been tracking the waste and failure of federal anti-poverty efforts, identifying $33 billion in potential one-year savings.  

CAGW’S publication Prime Cuts 2004 catalogues 592 recommendations throughout the federal government that if enacted, could save taxpayers $217 billion in fiscal 2005 and $1.65 trillion over the next five years.

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.