and 2003 had cost the government 225 billion dollars in revenues by the end of 2005, and
the administration’s request to make these tax cuts permanent and to repeal the estate tax
would lead to an additional trillion dollars in lost revenues over the next decade.
The
2004 corporate tax bill also included significant tax cuts and special subsidies for a long
list of U.S. corporations.
This trend is reminiscent of the Vietnam War period when the
Johnson and Nixon administrations refused to increase taxes to the extent needed to
finance the very costly war effort. Finally in 1971, Nixon took the dollar off the gold
standard, devalued the U.S. currency, and added a surcharge to all dutiable imported
goods, in the process demolishing the Bretton Woods system set up at the end of World
War II to foster global economic recovery and freer international commerce.
The lack of fiscal discipline extends to both ends of Pennsylvania Avenue. Total
government spending as a percentage of GDP and adjusted for inflation is now the
highest since the administration of Lyndon Johnson, and even if increased defense and
homeland security spending is factored out, expenditures are still at a thirty year high.
Government spending grew by 33 percent during George W. Bush’s first term and the
federal budget as a share of GDP grew from 18.5 percent on Bill Clinton’s last day in
office to 20.3 percent on the last day of Bush’s first term in office.
President Bush’s
budget request of 2.57 trillion dollars for fiscal year 2006 was one-third higher than the
A dreadful example of the spending mania afflicting contemporary Washington is
the 286 billion dollar transportation bill signed into law by President Bush in August
2005. The bill contained 6,370 earmarks, otherwise known as pet projects or pork-barrel
allocations, worth over 24 billion dollars or 9 percent of total spending.
Perhaps the
most egregious piece of pork was inserted by Representative Don Young of Alaska, chair
6
Convention