Budget Deficit Reaches $157 Billion | Citizens Against Government Waste

Budget Deficit Reaches $157 Billion

Press Release

For Immediate ReleaseContact:  Sean Rushton/Mark Carpenter
August 27, 2002(202) 467-5300

 

But Congress Just Keeps Raising Spending 

(Washington, D.C.) Citizens Against Government Waste (CAGW) today chastised congressional leaders of both parties for their outrageous refusal to reduce or even slow the pace of new federal spending despite current deficit estimates of more than $157 billion.

“While the deficit soars, members of Congress are busy pointing fingers while they raid the Treasury,” CAGW President Tom Schatz said.  “These ‘leaders’ have recently presided over a record year of pork-barrel spending, a bloated subsidy bill to Big Agriculture, a porked-up Defense Supplemental bill, a pay raise for themselves, and higher-than-requested spending in virtually every one of the fiscal 2003 appropriations under consideration.  Taxpayers should be scandalized.”

According to the House Budget Committee’s mid-year review, the current economic downturn accounts for 62 percent and 44 percent, respectively, of the total 2002 and 2003 estimated deficit changes.  From 2002-2011, the slower economy and higher spending account for 64 percent of the reduction in the estimated surplus. 

Additionally, according to the Office of Management and Budget (OMB), discretionary spending grew by an average of 6.3 percent and revenues grew an average of 4.3 percent over the past five years.  Given the economy’s crash, receipts are down but spending continues to rise.  The result is a deficit of more than $150 billion this year. 

Looking forward, with revenue down and the economy staggering, eliminating tax cuts (i.e. a tax increase) would be like tying a stone to a tired swimmer’s ankle.  Here are five commonsense steps to clean up government and reduce deficits:

First, put a lid on new spending.  Appropriations bills moving through Congress are already above the president’s budget requests.  Though it does not even have a budget, the Senate has increased the Labor/HHS/Education appropriations bill by $6 billion over the president’s request.  The OMB has recommended Congress limit spending to 2.6 percent real growth per year until 2005.  As OMB Director Mitch Daniels pointed out, “In a time of war and recession, other [budget] priorities will have to take second place.... there are plenty of places there to reduce spending when you separate the effective programs from the ineffective programs.” 

Second, put Congress on a pork-free diet.  This year, pork-barrel spending reached a record $20.1 billion, including $13.6 million for various wood research, $2 million to refurbish the Vulcan Statue in Birmingham, Ala., and $50,000 for a tattoo removal program in California.  This is borderline treason during wartime.

Third, eliminate corporate welfare.  It’s not just the corporate accounting scandals that create imbalances in the marketplace.  Political meddling costs taxpayers about $87 billion annually.  Cutting the Advanced Technology Program, the Economic Development Administration, and steel industry subsidies, for example, would save $4 billion in the next five years. 

Fourth, agencies must stop the nearly $20 billion they make each year in improper payments.  Medicare alone lost $12 billion this way last year.  Worse, there are few mechanisms for recouping lost funds, even though private companies exist that would do it for a percentage of the returned revenue.

Last but not least, Citizens Against Government Waste’s Prime Cuts catalogues 548 wasteful and mismanaged federal programs and agencies.  Cutting them would save $1.2 trillion over five years.  Examples include reforming milk orders (saving $669 million over five years) and eliminating the Crusader program (saving $1 billion over five years).  Critics of the president’s tax plan should be asked to explain why tax cuts are unaffordable when government bloat is ubiquitous. 

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

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