Dear Friend,

President Bush delivered his budget request to Congress last week. This budget covers the federal government’s fiscal year 2006, which starts in eight short months – on October 1 st.

Congress must now consider the President’s request and approve a final budget by April 15 th. The budget will dominate Congressional debate over the next two months.

As I’ve been looking through the President’s budget, I’ve been amazed at how misleading it is – and how bad it would be for our country. Adoption of this irresponsible budget would take the country on a path to economic and personal disaster and leave our kids holding the bag. Moreover, the Bush budget has all the wrong priorities.

THE BUSH BUDGET IS MISLEADING:

The Bush administration has hidden the extent of its fiscal irresponsibility by ending the traditional practice of providing budget figures for the next ten years – instead providing information on only the first 5 years.

Moreover, while the President has been claiming that his plan will cut the deficit in half by 2009, President Bush chose that date carefully as the endpoint for his deficit reduction plan. Under the policies the President has proposed, deficits grow substantially every year after 2009 FOR DECADES –massive deficits of $400 Billion, $500 Billion, $600 Billion, $700 Billion and more – as the Baby Boom generation retires and federal retirement and health care costs explode.

The President claims that his plan will cut the deficit in half by 2009, but to make the numbers work, his budget fails to reflect several large obligations that the federal government will have over the next couple of years:

IRAQ: The administration’s budget contains NO Fiscal Year 2006 money for the wars in Iraq and Afghanistan, even though those costs could easily reach $70 billion. The nonpartisan Congressional Budget Office estimates that if we gradually phase down our forces in Iraq over the next 5 years, the ten-year cost will be an additional $384 billion (bringing the total cost of the war from start to finish of nearly 600 billion).

SOCIAL SECURITY PRIVATIZATION : The President’s out on the road stumping for his plan to privatize Social Security, but his budget doesn’t include the transition costs his plan would require – somewhere around $754 billion, depending on when and how the plan is phased in. (the $754 billion figure assumes that the change wouldn’t be fully phased in until 2011). Vice President Cheney has stated that this plan will cost trillions of dollars in the coming years, and outside experts have estimated that it would cost $4.9 trillion over the first 20 years the plan is in operation.

MAKING THE 2001 AND 2003 TAX CUTS PERMANENT : Because the Bush tax cuts don’t expire until 2011, most of the cost of making them permanent falls outside the 5-year of deficit projections that the Administration has provided – although making the Bush tax cuts permanent would increase our deficits by $1 trillion over the next 10 years. That, I believe, is one of the reasons that the administration has stopped providing ten-year numbers in its budgets. Over the same period of time that Social Security will experience a revenue shortfall of $3.7 Trillion, the President’s tax cuts will reduce revenue to the federal government by $11.6 Trillion.

FIXING THE ALTERNATIVE MINIMUM TAX : The alternative minimum tax currently affects about 2-3 million people, but since it’s not indexed for inflation, it will soon affect tens of millions of middle-class households – raising taxes on all those families. The President has put off fixing the alternative tax in favor of giving tax breaks to millionaires, but we’re going to have to bite the bullet some time soon, and the ten-year cost of fixing the AMT is $642 billion.

Nearly $3 TRILLION in additional spending and tax cuts was left out of President Bush’s budget.

When you add in the additional debt service on the cost of those initiatives, the President’s budget would produce close to $4 trillion in increased government borrowing and the interest payments needed to finance it over the next 10 years.

Under the President’s budget, annual interest payments on the national debt will double from $150 billion a year last year to $300 billion in 2010. We’re throwing away hundreds of billions of dollars a year in interest payments on the national debt, choking off economic growth, and saddling our children with backbreaking interest payments. Many respected economists now say that the deficits caused by the President’s (2001 and 2003) tax cuts will be more of a drag on the economy than a stimulus.

In addition, the Bush budget plan assumes that domestic discretionary spending will be cut by $212 billion over the next five years. This level of funding is so radical that many Republicans in Congress are already expressing concern about it. And even those dramatic cuts wouldn’t begin to eliminate the deficits that are expected in future years.

Finally, the Bush Budget uses the growing surpluses in the Social Security Trust Fund to mask the true size of the gap between the federal government’s revenues and its spending.

THE BUSH BUDGET IS IRRESPONSIBLE AND WOULD BE TERRIBLE FOR OUR ECONOMY:

The Bush budget continues the Administration’s misguided fiscal policies of cutting taxes at a time of massive deficits and increased spending on the war on terror.

Moreover, it makes our fiscal problems bigger by proposing a massive new initiative to privatize Social Security, and it proposes massive cuts in critical domestic discretionary programslike health care, community development, education, and law enforcement. President Bush calls for $214 billion in domestic discretionary programs over the next 5 years. These spending cuts would devastate our communities and our society’s most vulnerable members.

Despite major cuts in domestic spending programs, the President’s budget increases deficits in the coming years. The continuing large structural federal deficits are due in large part to the tax cuts enacted in President Bush’s first term.

The Bush Budget will produce unsustainable deficits for decades to come. These deficits will sooner or later produce higher interest rates that will choke off economic growth.

Most of the increased debt will be purchased by foreign investors – making us dependent on foreign governments.

These massive structural deficits will produce crushing debt that will make it harder to fix Social Security and which will lead to interest payments that are a tremendous burden on our kids.

Our deficit would be half as big today if it weren’t for the tax cuts that President Bush and the Republicans passed in 2001, 2002, 2003, and 2004. The Bush tax cuts will make up $258 Billion of the $427 Billion FY 2005 deficit.

THE BUSH BUDGET REFLECTS THE WRONG PRIORITIES:

A budget is a statement about priorities. The President’s priorities differ greatly from those of the American people.

I believe that most Americans want a fiscally responsible government and a government that invests in our nation’s future, provides a safety net for our society’s most vulnerable members, and allocates the burden of government fairly.

In contrast, the President proposes massive new tax cuts and an expensive, radical plan to change the Social Security program while cutting important domestic spending programs and drastically increasing the national debt by borrowing trillions of dollars.

For the third year in a row, the Administration’s budget calls for a new record deficit, $427 billion. President Bush has promised to produce a budget that cuts the deficit in half by 2009, but he has failed to offer a credible plan to achieve that goal. On the contrary, his budget and his policy agenda for his second term would drive the deficit dramatically higher.

The President calls for sacrifices from most Americans – sacrifices like Social Security benefit cuts and cuts in Medicaid– while asking for no sacrifices from the wealthiest Americans. In fact, President Bush is the first president to call for annual tax cuts in a time of war, and he proposes new tax cuts – like Health Savings Accounts -- that would disproportionately benefit the wealthy.

The President has sent a budget to Congress that cuts spending on domestic discretionary programs drastically. His budget fails to adequately address the pressing need our country faces for greater investments in education, research, and health care.

His policies shift more of the burden of caring for the elderly and the poor onto our state and local governments at the same time as he imposes new mandates on them like the No Child Left Behind Act.

And most significant of all, the President proposes eliminating Social Security’s guaranteed decent standard of living for future retirees while leaving those same individuals to bear the heavy burden of the massive deficits his policies create. The tax cuts and borrowing he proposes would reduce future incomes significantly and burden today’s young people with a back-breaking level of debt. Despite his claims to the contrary, the President would do our children and grandchildren no favors. In my opinion, those are the wrong priorities for the federal government.

I will be pushing hard in the coming months for Congress to adopt a responsible common-sense budget that preserves Social Security’s guaranteed benefit for retirees, keeps our communities safe and vibrant, and makes the investments necessary to ensure our nation’s long-term economic growth and job creation.

It continues to be a pleasure to serve you, and I look forward to hearing from you. Please feel free to e-mail me at Rep.Doyle@mail.house.gov to share your thoughts with me or to request assistance in dealing with the federal government – or, if you prefer, you can use my web site, www.house.gov/doyle.

Until next time, I am

Sincerely,

Mike Doyle

Member of Congress