Leader Blues

Wednesday, March 02, 2005

EDITORIAL>> Bush budget cuts start to hit home

Blue-state bloggers have had a field day with President Bush’s proposed budget, calling it the blue states’ revenge.

They enjoy the spectacle of governors from states that went for Bush in 2004, like our own Mike Huckabee, whining in Washington about how unjustly the president’s budget treats their states.

Parts of the president’s spending blueprint does seem to land a heavier blow on poor states dependent upon a higher quotient of federal matching funds and on the states of the Great Plains that prosper on agricultural subsidies. But the fun lovers of the coastal states that voted Democratic have little to chortle about once they follow the money.

The joke is on everyone, everyone, that is, who doesn’t earn, say, a million a year or more.

Let’s forget the blue-state, red-state nonsense and focus on what the budget does to the nation as a whole and our little corner of it. Gov. Huckabee is exercised primarily over the administration’s plan to trim $60 billion from Medicaid assistance to the states by 2010. Arkansas gets a greater per-capita allotment of federal Medicaid dollars than any state but Mississippi owing to our low income standard and high percentage of poor.

A cut will force Mike Huckabee to make wrenching decisions: Who among the 717,000 destitute elderly and children will he deny medical assistance? Huckabee was there once before, and he just couldn’t do it. He found a bundle of state dollars to get him through the crisis. But this won’t be temporary.

Sen. Blanche Lincoln, who has tended to befriend the administration on budget matters, is furious. We have a hunch the president’s big cuts in farm benefits — he would slash crop subsidies by 5 percent and lower the ceiling on aggregate payments to big farm operations — are the principal source of her ire. A spokesman for the Arkansas Farm Bureau, whose members largely supported the president in 2004, said farmers felt betrayed by subsidy reductions that would amount to hundreds of millions of dollars a year. That would, indeed, be a blow to the farm community that would reverberate throughout the Arkansas economy.

But we do not worry much about that. We have an idea that Congress will take care of agriculture and that the president will not invest much capital fighting for those cuts.

Quite a few corporate farms may actually be helped by Bush’s program. His plan phases out two obscure tax provisions that limit deductions and exemptions for very high-income households. Half the benefits would go to those making more than $1 million a year, 97 percent to those making more than $200,000 a year.

Here’s a small coincidence: The number of people earning more than $1 million a year who would get a hefty tax subsidy is almost exactly the number of Americans whose food stamps would be cut off under Bush’ s austerity budget.

We worry about deep reductions in other services that are important to Arkansans.

Here are a few of them: cuts of $118.4 million over five years for the education of disadvantaged Arkansas children under the Elementary and Secondary Education Act; $75.1 million for gifted education and other special-education programs; $61.3 million for vocational and adult education (eliminated); $42.9 million for school improvements under the president’s school reforms; $7.5 million for 7,600 nursing women and infants under the Women, Infants and Children program; $32.5 million for Head Start and other child and family services; $1.7 million for HIV/AIDS drug assistance; $73.3 million in community-development grants for poor Arkansas communities; $1.4 million for energy assistance for destitute families; and millions for rental assistance and child care for poor families.

All the cuts are supposed to help balance the federal budget.

Until this year, the president and his team had insisted that budget deficits didn’t matter because the economy was growing as a result of four rounds of tax cuts in his first term. Now they are supposed to matter.

If they do, and we think they do – these cuts will do very little. They are more than offset by burgeoning spending on homeland security, the wars in Iraq and Afghanistan and military procurement, although Bush wants to kill the C-130J cargo plane.

What would make a difference, and we hope Senators Lincoln and Pryor now realize it, is to permit the tax cuts for those making $200,000 a year to expire. Merely eliminating the Bush tax cuts in 2003 on stock dividends and stock appreciation would produce $120 billion a year, some $700 billion over the life of the budget reductions that we just mentioned.

That strikes us as eminently fairer, in blue Massachusetts as well as red Arkansas.