Each year it is the President’s duty to report to the people on the State of the Union.  It is a time to celebrate past successes and lay the groundwork to attain future goals.  For a new president, it is a time to set the tone for his administration.  President Bush recently delivered his first State of the Union address, and although he could not take credit for the largest economic expansion in the history of the country, he had the opportunity to give us his vision of how his predecessor’s success could be continued.  I was gravely disappointed in the recycled, failed policy he outlined.

For those who remember President Reagan’s trickle down economic policies, President Bush’s speech was déjà vu.  His own Treasury Secretary Paul O’Neill had just a few weeks earlier told a House Ways and Means Committee panel that those same policies put America “in a ditch that was horrendous.” 

Trickle down economics failed because the exorbitant tax cuts for the wealthy, that were meant to stimulate the economy, actually resulted in huge government deficits.  When the economic boon Reagan predicted did not materialize, interest rates soared as the deficit grew to unmanageable levels.  It took more than a decade to set the economy on the right course, which occurred when President Clinton’s first budget passed Congress in 1993, without one Republican vote.   The economy remained strong as a result of fiscally responsible spending and concentrated efforts to pay down the debt. 

Yet despite the proven track record of these financial policies, President Bush used his first State of the Union address to introduce a $1.6 trillion tax cut package that would give 43% of the benefit to the wealthiest 1% of Americans.  Those who make over $900,000 a year would be the prime beneficiaries.  Even Bill Gates, Warren Buffet, and members of the Rockefeller family believe giving them this unnecessary tax cut will result in cuts to Social Security, Medicare and other essential programs, or even worse, cause taxes to increase on those who can least afford it.

I too share the concern of these billionaires about the solvency and stability of  Social Security and Medicare if they are given such a mammoth tax break.  We must preserve these essential programs first, before we even discuss a tax cut package of any size. However, the only way to achieve President Bush’s tax cuts without raiding both the Social Security and Medicare trust funds is by using “fuzzy math.”  

Fuzzy math must also come into play when setting the tax cut package’s $1.6 trillion price tag.  That could very well be the amount the federal government will lose in revenue if Bush’s package is enacted, however it doesn’t take into account the trickle down effect this loss of revenue will have on the rest of the budget.  Without substantial funds going to pay down the debt, more resources will be needed to pay interest on our deficit balance.  Democratic leaders estimate those interest payments along with other hidden costs will bring the entire tax cut package price tag to $2 trillion.