April 3, 2001

Following the Money: The Administration's Budget Priorities

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On March 28, the Center on Budget and Policy Priorities released a report, Following the Money: The Administration's Budget Priorities. The report examines the Administration's budget in the context of President Bush's February 27 address to Congress and the American people, in which he called education his highest priority and pledged to devote new resources to education, health care, national defense, and other areas. The report examines how education and other priorities would fare, especially in comparison to the Administration's tax cut. It finds that the budget would commit virtually the entire available surplus to tax cuts. The report's main findings are summarized below.


The Dimensions of the Available Surplus


The Dimensions of the President's Tax Cut


How Would Other Parts of the Budget Fare?


Is the Top Priority Tax Cuts for the Affluent or Education, Health, and Other Initiatives?


Conclusion: A Question of Priorities

The findings in this report raise several questions. Is it prudent to commit virtually the entire available surplus now, given that the surplus figures are only projections and are highly uncertain? Is it a proper reflection of the priorities of the American public to commit virtually all of the available surpluses to tax cuts, with little left for other problems or opportunities? Should very large tax cuts for the wealthiest of Americans, the group that by far has secured the biggest income gains of recent years, be a higher priority than providing an adequate prescription drug benefit to the elderly and disabled, substantially reducing the number of Americans without health insurance, helping to restore long-term solvency to Social Security and Medicare, and reducing child poverty? These are questions that not only policymakers, but also the American public, should debate. A tax cut that may consume virtually all of the available surpluses for a generation or more ought not be rushed through before such a debate can take place.