Tax cuts to continue, social programs to be slashed in wake of Hurricane Katrina

“You bet it’s going to cost money,” Bush said. “But I’m confident we can handle it. It’s going to mean that we’re going to have to cut unnecessary spending.” Administration officials said that the spending would not require new taxes, nor would it mean a shift in the administration’s policy of pushing to make its tax cuts for the wealthy permanent.

The administration has not given specific proposals for cuts, but according to the New York Times on Saturday, “An administration official said the White House and Congress will look for specific spending cuts, starting with about $20 billion in savings identified in the president’s 2006 budget. Still more could come from changes to entitlement programs to slow their growth.”

The Times points out that some of the proposals for cuts in the 2006 budget include programs needed for rebuilding devastated areas and aiding evacuees. These include $60 billion from Medicaid over the next ten years, as well as cuts to the budget of the Army Corps of Engineers, which is responsible for maintaining public infrastructure such as the levees surrounding New Orleans.

Besides Medicaid, the other two major entitlement programs—Social Security and Medicare—may also be slated for the chopping block. Lawmakers have suggested that the Medicare prescription drug benefit may be delayed, while the administration may use the hurricane to try to push through its plans for a partial privatization of Social Security.

On Friday, the government announced that basic Medicare premiums will jump 13 percent next year. The administration had previously proposed cutting funding for the food stamp programs, eliminating 200,000 to 300,000 beneficiaries, and has sharply slashed the budget of the department of Housing and Urban Development (HUD), which subsidizes public housing for the poor.

In pledging to balance any new spending with cuts elsewhere, Bush was responding to pressure from within his own party and from his corporate backers, who have been increasingly vocal in their concern over projections that the bill for the reconstruction effort could reach $200 billion. While worried about the effect of this massive and unexpected allocation of resources, the administration is determined to make the most of it.

The real thinking behind Bush’s statements was expressed by Douglas J. Besharov, a researcher at the right-wing American Enterprise Institute, who has been in discussions with the White House in recent days. Besharov told the Washington Post, “If there is a silver lining in this tragedy it is that it is creating an atmosphere to try new approaches to ending long-term poverty.”

In other words, the tragedy will provide an opportunity for the government to continue a policy of shifting away from entitlement programs and toward programs long championed by think tanks such as the AEI and the Heritage Foundation: tax incentives for corporations and school vouchers that can be used at private schools.

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http://wsws.org/articles/2005/sep2005/hurr-s19.shtml