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Vin Suprynowicz

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MODEST SPENDING CUTS SEND DEMS SCAMPERING

No, the war in Iraq is not cheap, and neither was the creation of the shambling giant known as the Department of Homeland Security. But those aren’t the main reasons federal spending has grown far faster under President Bush than under his Democratic predecessor, Bill Clinton. Boosts in domestic wealth-transfer programs, which punish hard work while rewarding the behaviors that lead to poverty, have also played a major role -- and that role will only get bigger when the new Medicare prescription drug benefit takes effect Jan. 1.

The GOP’s drunken-sailor act has gotten so bad that even Democrats, who used to figure no one could outspend them, had been making some noises about fiscal restraint.

But now that Republican congressional leaders are actually talking about a modest $50 billion in trims from wasteful and counterproductive federal wealth transfer schemes -- to make up for just part of the $65 billion or more that Washington is throwing in bushel baskets at the storm-damaged Gulf coast (“We love black people, see? Federally subsidized hush puppies!”) -- Democrats are quickly showing their true colors, running to hide under the porch like small dogs whose bluff got called, sounding their usually yippy chorus about how Republicans are “trying to balance the budget on the backs of the poor and the needy.”

Last spring, Republicans passed a congressional budget that called for “cutting” (we have to be careful of Washington-speak, here -- “cuts” often means continued increases at a slightly reduced rate) a modest $35 billion over five years from federal benefit programs such as Medicaid, food stamps and farm subsidies. About $10 billion would come from changes in Medicaid and Medicare, $3 billion from cuts to farm subsidies and $8.5 billion from increasing fees charged to lenders who make student loans. (Those fees would eventually be passed on to the students, Democrats complain.)

“We need to use the hurricane as an incentive to tighten our belt,” Rep. Todd Akin, R-Mo., told the St. Louis Post-Dispatch.

Akin gave the food stamp program as an example. “It turns out we’re giving food stamps to illegal immigrants. I have sympathy for illegal immigrants, but I’m not sure I want to give food stamps to them.”

But Democrats such as Rep. Russ Carnahan, D-Mo respond that Republicans are “sending a divisive message” (unlike Democrats) by making budget choices that pit the rich against the poor -- and the illegal, apparently. The $50 billion in proposed cuts would “target the very programs hurricane survivors are relying upon -- Medicaid, food stamps, student loans,” says Rep. Carnahan. “And to make things worse, they are proposing these $50 billion in spending cuts at the same time they are seeking $70 billion in new tax cuts for the wealthiest Americans.”

Actually, Republicans want to keep tax rates right where they are; Democrats want to let the initial round of Bush tax cuts expire. In either case the current tax system is unconstitutionally enforced and at least 90 percent too high, but only in the topsy-turvy world of left-wing Washington rhetoric could keeping tax rates right where they are be called “new tax cuts for the rich.”

Do tax cuts benefit high wage-earners more than unemployed poor people whose flush toilets and color TVs and central heat and air conditioning are subsidized by the taxpayers? Of course. It’s hard for someone who pays no taxes to benefit from a tax cut -- except in the sense that lower taxes leave more capital for private investment that might offer those welfare cases a job, if they wanted one.

Will the cuts in question “hurt the poor”?

Just the opposite. Tax subsidies for student loans have historically only driven up tuition to the point where it’s not affordable without a subsidized “student loan.” Who benefits? The staff and faculty of wealthy endowed universities, who get to charge much more than the market would otherwise bear. Eliminate the loan subsidy program completely -- as Congress should -- and tuitions would have to fall back to more affordable levels.

The Medicaid programs sends no money to poor people for their medical care. Zero. Rather, it subsidizes (while making much more complicated and cumbersome) the “charity” care that wealthy doctors and hospitals used to provide for free, 50 years ago. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, points out the proposed cuts would be felt not by the programs’ beneficiaries but by hospitals, doctors, pharmacies and drug companies. The government would pay less for drugs for Medicaid patients, for example, and it would adopt a performance-based system of paying doctors and hospitals under Medicare. Democrats should love these “cuts”; they hurt “wealthy” doctors!

In fact, the planned GOP package of “cuts” would actually add $4.3 billion to federal spending next year, thanks largely to a $1.8-billion “down payment” in federal Medicaid payments to victims of Hurricane Katrina and replacement of the scheduled 4 percent cut in doctors’ reimbursements for serving Medicare patients with a 1 percent increase.

If Democrats really wanted to end “corporate welfare for the rich,” and put these so-called GOP “budget-cutters” to shame, they could start by ending subsidies to wealthy agribusiness conglomerates, aerospace firms, energy companies and construction outfits (think new Alaskan bridges to nowhere, larded into the new “energy bill”) by de-funding and shutting down NASA and the Departments of Agriculture and Energy, completely, right away.

Any takers? Senator Reid?


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