African Americans, haunted by double-digit unemployment rates and federal deficits to cover policy makers with excuses for not funding programs, now face another threat: a “buy now, pay later” federal budget that mortgages the future and proposes tax cuts that favor America’s rich.
In January 2001, the nonpartisan Congressional Budget Office (CBO) projected a cumulative federal budget surplus of $2.5 trillion for the fiscal years 2004 to 2008. This March, Congress began working on President George W. Bush’s budget proposal, just as the CBO was increasing its projection for the federal deficit this year by 24% to $246 billion. With the proposals for tax cuts the president made in his budget, the CBO projection was an increase in the deficit this year to $287 billion, which represents a cumulative deficit of $1.2 trillion from 2004 to 2008. That’s a swing from surplus to deficit of $3.7 trillion in a two-year period. The question is, what happened to all that money?
It’s not the war in Iraq. Part of the story, of course, is the current slowdown in the economy. But the clear difference is from changes in the tax code. Here, the math is clear. The CBO projects the president’s budget will generate deficits totaling $1.8 trillion from 2004 to 2013. It also projects that the proposed changes in the tax code would cost $1.6 trillion. That’s almost a dollar for dollar match.
The president’s proposed elimination of the individual tax on dividend income from corporations would cost a projected $388 billion over the 2004 to 2013 period. What would $388 billion get you from the federal government? You could run the entire U.S. Department of Education, and all of its programs, such as grants or assistance for low-income students. You could also run the entire U.S. Department of Labor, all of its programs — from Job Corps to helping people find jobs to the Employment Standards Administration to ensure federal contractors comply with equal opportunity hiring laws, as well as fund the Small Business Administration and all of its business programs and staff from 2004 to 2008. With that kind of money from the president’s budget being diverted to just one tax cut proposal, clearly the programs in those departments are not a high priority.
Instead of seeking more tax equity for African Americans, such as allowing for the deduction of housing expenditures and private mortgage insurance, which lead to disparities in the after-tax income of African Americans and whites living in similar homes, the president has directed his tax cuts to lowering marginal tax rates at the high-income levels.
To make matters worse, our children will wake up in 2014 wondering where the money went when they get the bill for the federal deficit and the unfunded gap in Social Security benefits. Too bad, since the president’s tax bill is large enough to close the long-run funding gap for Social Security and Medicare. Wouldn’t that be a better legacy to leave our children: a note, paid in full?
William E. Spriggs, a member of