Facebook Twitter



Despite President Bush's call for an end to partisan bickering, the 1993 proposed budget he sent to Congress Wednesday is the most openly political in years.

If it were not an election year, Bush would never have proposed it.For the first time in U.S. history, Bush proposes to borrow more than one-fourth of the entire 1992 $1.4 trillion budget. Next year he says almost one-fourth of $1.5 trillion he wants to spend has to be borrowed.

In the short run, the Bush budget proposal is designed to help the real estate industry, families with down payments to buy houses, people selling assets such as stocks or houses, people who want to buy yachts and planes and people who want to deduct the interest from college loans.

The budget blueprint is a flat admission that reducing the national gush of red ink is a pipe dream. Bush's own top three economic advisers said Wednesday that the economy will improve by summer without the reimposition of the tax shelters and tax cuts Bush seeks. Federal Reserve Bank Chairman Alan Greenspan said the same thing.

It is a budget that does not take into account the cost of Bush's plan for increasing access to health care for the 37 million Americans who currently have none. He will spell out that proposal Feb. 6.

The budget is an aggressive challenge to the Democrats to cut taxes for investors and the well-to-do if they want to be able to offer the middle-class voter a break.

No Democratic leader openly scoffed at the package. But neither did any promise to try to meet Bush's arbitrary March 20 deadline.

Budget director Richard Darman admits the administration failed to assess how sick the economy was and that this downturn is no longer a "rust belt recession." A new "sense of worry has developed among `middle class' workers and families," Darman says.

Accordingly, the Treasury Department put out this best-case scenario for the "average" American family - IF Congress passes Bush's plan.

A couple, 28 and 30, married six years, have one child and another on the way. Their combined income is $44,500; they have never bought a house. If they buy a $60,000 town house before Dec. 31 and withdraw $5,000 from their IRA for a down payment, Treasury says they could save $3,187.50 in taxes this year.

They would get a $2,500 tax credit for 1992 for buying a home, $37.50 savings because of the child exemption increase (to take effect Oct. 1), $150 by deducting interest on $17,000 in student loans, and $500 for not owing a penalty for breaking their IRA.

But out of 93 million households, only about 4 percent buy houses in any given year.

A family that can't afford to buy a house or that already has one doesn't make out so well under Bush's plan. Treasury's family with three children under age 18 and total earnings of $40,000 would save $56 this year and $225 next year.

Bush's big plan to pump $25 billion into the economy this year is to decrease federal withholding taxes and thus fatten workers' paychecks. That means the tax rebate checks many Americans have gotten used to as a way of forced, interest-free savings would disappear or be smaller. But not until next year, after the election.