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Taxes and the beast


A COUPLE of hundred thousand employees of Maryland's single largest employer, the federal government, can look forward to salary increases that may barely keep pace with inflation. Federal funds to restore Maryland's greatest natural resource, the Chesapeake Bay, may fall by $50 million, putting more pressure on strained state resources. And community development, housing and rental programs, heavily used in Baltimore, may be cut.

These are among the outcomes sought by President Bush's 2005 budget, just some of the damage from holding nearly all federal programs - apart from defense, national security, Social Security and Medicare - to just 0.5 percent growth.

In certain conservative quarters yesterday, this budget, taken at face value and without full reference to the fiscal irresponsibility of the president's first three years, was hailed as a watershed, a turn to clamping down on Washington spending and to clearly choosing guns over butter. Beware: The next stop for this crowd will be Social Security and Medicare cuts.

Ignoring for the moment the many layers of duplicity in this budget - for starters, it leaves out big costs for Iraq and for the further tax changes sought by the administration - we agree that the nation's rapidly worsening finances under Mr. Bush call for much greater spending restraint for years to come. There's that much red ink flowing.

But let's not forget how this gusher sprang from a Treasury that had been running a surplus - to a great degree not so much because of excess spending but because in Mr. Bush's first three years he handed out billions of dollars in tax cuts disproportionately benefiting the top 5 percent of households, those making more than $145,000 a year. These cuts account for almost $300 billion of the projected 2005 budget deficit of more than $500 billion.

This, of course, is in line with the Republican right's theory that the only way to cut federal spending is by starving "the beast," reducing the stream of tax money into Washington. Mr. Bush has so succeeded that income tax revenues as a share of the total economy are at their lowest since World War II and federal revenues by that same measure are at their lowest since 1950. And he now wants to make sure the beast stays starved by making permanent these cuts, thereby cutting off almost $2 trillion in potential federal revenue over the next decade and ensuring a hobbled Washington.

The real choice before Americans isn't so much between guns and butter. It's between starving domestic programs or ending tax cuts that would give the top 1 percent of all taxpayers 90 times more savings than those received by the middle 20 percent.

Or to put it even more concretely, would you rather restore the health of the bay or keep tax cuts that saved Americans making more than $1 million a year an average of $113,000 last year?

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