More Missing Pages
By: Paul Krugman
Whatever really happened, the fundamental cause of the mishap was that the Republican leadership was trying to pull a fast one — to rush through a huge tax cut before anyone had a chance to look at the details. Now the case of the missing pages has delayed things for a few days. So may I suggest that Congress — and Senate moderates in particular — check carefully around that Xerox machine? You see, there seem to be a few other pages missing from the budget plan.
For starters, we seem to be missing the page that factors in the likely cost of a missile defense system. (The page that explains how missile defense will work in the first place is missing from some other document.) Nobody knows how much this system will cost, but few think it will come in under $100 billion.
We also seem to be missing the page that explains how the conventional defense buildup being planned by Secretary of Defense Donald Rumsfeld — reports suggest an extra $25 billion per year on weapons systems alone, that is, $250 billion or more over the next decade — is consistent with a budget that makes no room for increases in defense spending beyond those already proposed by the Clinton administration.
Then there's the page about prescription drug coverage under Medicare — a solemn pledge by Mr. Bush during the campaign. Everyone in Congress agrees that the $115 billion allotted by the administration is laughably inadequate, that a realistic program would cost hundreds of billions more. But the extra money doesn't seem to be in the budget plan; maybe the missing page explains the discrepancy.
Somewhere near the page on prescription drug coverage we might find an explanation of the administration's position on the Medicare hospital insurance surplus — $400 billion that both parties have promised to put in a "lockbox," but which the administration plans to devote to other uses. Presumably there's a missing page that explains why this isn't a naked plan to raid Medicare to pay for tax cuts.
Then there's the puzzle of how the administration plans to maintain government services in the face of a growing population while increasing spending no faster than inflation. Either some unspecified drastic cuts are planned or the spending numbers are at least $400 billion too small. I'm sure there's a page somewhere that explains what's going on.
Not all the missing pages involve spending. Everyone familiar with the issue knows that the Bush tax cut will cause a crisis involving the Alternative Minimum Tax, causing the much-hated tax to apply to tens of millions of additional taxpayers. The inevitable fix will reduce revenue by at least $300 billion, but there doesn't seem to be any allowance for that revenue loss in the budget. I guess there must be a missing page that explains why.
Finally, there's the page on Social Security reform. Because Social Security has been run on a pay-as-you- go basis, with each generation's taxes financing the previous generation's retirement, the system has a huge "implicit debt" — the money promised to people whose past contributions were used to support their elders. If Mr. Bush wants to partially privatize the system, he must pay off some of that implicit debt; to make his campaign proposal work would require infusing more than a trillion dollars into the Social Security system. But that money isn't in his budget plan. There must be a missing page with some explanation of the omission.
Oh, and there's one more page missing: the one that explains why moderates should support a tax cut that, while slightly smaller than Mr. Bush wanted, is still irresponsibly large — and why they should put their names to a budget resolution that is patently, shamelessly dishonest.
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