San Jose, CA – In February, President Bush sent Congress his budget proposal wrapped in a red, white and blue American flag. The winners? Wealthier Americans who will get almost $600 billion more in tax cuts over the next ten years (on top of the $1.5 trillion tax cut passed last year) and the military, which will have $550 billion more to spend over the ten year period.

The poor are to be literally left out in the cold, with an 18% cut in programs to help low-income families pay their winter utility bills. Funding for welfare, childcare for low-income families, and job training for the unemployed will either be cut, or funding will be frozen at a time when prices and the need for these services are on the rise. Also on the chopping block are spending for highways, disease prevention, and the environment. Last but not least, lurking in the shadows of the Bush budget is the prospect of years of deficit spending, which will be used to as an excuse to cut more programs and to privatize social security.

Twenty years ago, then-President Reagan made similar proposals to build up the military and cut taxes for the rich, which caused the federal budget deficit to balloon. Reagan's budget, attacks on labor unions, and deregulation of the economy to benefit big business came to be known as

“Reaganomics.” These policies widened the gap between the rich and the poor, ground down those in the middle, and led to increasing U.S. military intervention overseas.

Bush's budget and the “economic stimulus package” that Bush signed into law in March will also worsen the budget crisis that state governments face. Since the recession began last March, most state governments have seen their tax revenues fall, forcing states to raise taxes, cut programs, or both.

The Bush budget proposal will reduce funding for state programs, while the tax cuts for corporations will further reduce state tax collections. Here in California, the state government has already cut funding for childcare for families leaving welfare, and non-profit agencies that provide shelter, food, legal, and other aid for the poor are facing large cuts in next year's budget.

If strong economic growth resumes and the deep cuts proposed by Bush pass Congress, the new tax cuts in the Bush budgets will lead to budget deficits for at least the next three years. But the experience of the Reagan budgets show that short-term deficits turn into long term deficits.

Right now, government deficit spending can help to make up for the lack of business spending on new buildings and equipment that deepened the recession. But as year upon year of deficits starts to increase the government's debt, politicians are sure to call for more cuts in social programs. Wall Street will seize the opportunity to restart their efforts to privatize social security, which would lead to billions of dollars in profits for them, while putting working peoples' retirements at the mercy of the stock market and crooked corporate executives.

While Democrats in Congress have been criticizing the Bush budget, there is little hope that they will do much unless there is strong grassroots opposition. Look at what happened with the economic stimulus package which passed Congress in March: more than $30 billion dollars in aid for business, while only $3 billion went to unemployed workers to extend unemployment benefits. There was no aid for the unemployed who have lost their health insurance, nor any aid for the states whose budgets are hurt by the recession. Left to their own devices, the Democrats are likely to take a few crumbs from the Republicans, and vote to support the military build-up and tax cuts for the rich. Only a strong people's movement against the bipartisan pro-war and pro-corporate policies can make any real changes to the Bush budget.

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