(Washington, D.C.) – Citizens Against Government Waste (CAGW) today had a mixed reaction to President Bush’s $2.8 trillion fiscal 2007 budget request.  Although the President has proposed $65 billion in savings over five years through a combination of program reforms and spending cuts, the fiscal 2007 projected deficit is $423 billion, an increase of 33 percent over the $318 billion deficit in 2005.  President Bush’s initiatives ranged from the Good to the Bad and the Ugly for taxpayers.  Below are some of the highlights and lowlights from the President’s budget:

The Good

The President’s proposed Health Savings Accounts would allow more workers to save and spend tax-free money for medical needs with the purchase of high-deductible health insurance policies.  The accounts would give health care beneficiaries control over some of their medical expenses and promote cost-consciousness in health care consumers and providers. 

In another positive development for taxpayers, the President has proposed either sharply reducing or eliminating the funding of 141 discretionary programs, at a savings of $14.5 billion.  Of the 793 programs analyzed by the administration’s Program Assessment Rating Tool (PART), 219 were rated either “ineffective” or “results not demonstrated.”  The President’s budget eliminates funding for 11 “ineffective” and 30 “results not demonstrated” programs.  If enacted, the cuts will remove 41, or 19 percent of the 793 underperforming programs from the budget.    

On the mandatory spending side, President Bush proposed trimming Medicare by $35.9 billion over five years, with similar restraint in the growth of other entitlement programs.  These changes in entitlement spending are insufficient given their runaway growth; such programs already account for 53 percent of total spending.  Despite these flaws, the reductions are an important step in conditioning the public to accept necessary reforms to programs that are growing at unsustainable rates.

The Bad

President Bush introduced the “American Competitiveness Initiative,” designed to encourage global competition.  One of the goals of this initiative is to train thousands of new science and math teachers.  It has been shown time and again that increased federal spending on education does not produce results.  For instance, the No Child Left Behind Act directs additional money into the hands of those running failing schools.  Despite spending billions, taxpayers have seen little improvement in test scores since the Department of Education’s creation in 1979. 

Even with the President’s proposed program cuts, inefficient programs still linger.  The Dairy Price Support Program is an example of a poorly performing discretionary program that was not cut.  The program began in 1933 to assure an adequate supply of milk.  Despite the current challenge of oversupply in the dairy industry, the purpose of the 70-year program has not been revised since its inception.  It is authorized through December 2007 and the President has requested $21 million to maintain it.

The Ugly

The Democrats’ response to Republican budget-cutting proposals is to blame the deficit on the President’s tax cuts without proposing a real budget strategy of their own.  The opposition party additionally frustrates efforts to trim the budget by decrying the President’s initiative to make his tax cuts permanent. 

“Failing to extend the 2001 tax cuts would endanger job creation as well as economic growth and would not address the underlying cause of deficits – runaway spending in Washington,” CAGW President Tom Schatz said.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.