Ride a bicycle on A1A between Delray and Palm Beach, and you get a visual sense of the meaning of all those dry reports that say that America's richest folks are doing better than ever.
New gigantic houses are springing up, dwarfing the stately mansions of 20 and 30 years ago. The yachts, too, are sleeker and larger, and everywhere there are ``private'' and ``no trespassing'' signs barring public access to the beach.
Earlier this year, at the urging of the Bush administration, Congress gave a hefty tax cut to the folks who live in these houses and own these yachts, as well as to others not quite as rich but very well off indeed. Now the bill for this largesse is coming due with a vengeance. Those who will suffer will not be the people who own palatial residences along the Gold Coast. They will be the elderly living on modest fixed incomes in Little Havana and North Miami Beach and who struggle to make ends meet while paying for the skyrocketing cost of medicines.
Hope for relief for strapped seniors is vanishing with the budget surplus -- the surplus that, according to administration officials only a few months ago, was so vast, it could pay for the tax cut and much more.
Indeed, the bipartisan Congressional Budget Office recently reported that because of the tax cut and slow economic growth, the government will be forced to tap $9 billion out of the Social Security reserve to balance this year's budget. Next year, twice that amount will be needed. Independent economists concur with the CBO assessment.
The administration had promised not to dip into Social Security, so now it is trying to spin the situation in a couple of ways:
Blame it all on the economic downturn. Yes, the slowdown in the economy accounts for a substantial portion of the budget problem, but when the administration developed its budget, it knew that the slowdown was coming. Isn't this the administration that predicted a recession before it got into office, stressing the point so much that some people blamed it for creating a self-fulfilling prophecy? How come it did not take the tanking economy into account when it was selling the tax cut?
Say that it just isn't so. To take the winds out of the CBO report, the White House released its own budget numbers just before the bipartisan projections became public. Those number come from the Office of Management and the Budget and show a shrinking surplus providing just enough money to run the government without touching Social Security.
Unfortunately, the administration's budget numbers now are no more credible than the inflated projections of a few months ago.
JUST PRETENDING
``The O.M.B. numbers are the result of desperate backing and filling -- shift some revenue from this year to next year, then move some of it back, then change accounting rules that have been in place for 65 years, then bump up the estimate of economic growth -- all so that the administration can pretend that it is keeping its promise,'' writes MIT economist Paul Krugman.
The dismal new budget projections are likely to lead to a second broken promise, one that Congress and the administration made to elderly Americans: that they would receive help to pay for prescription medicines.
The prescription-medicine benefit would cost $300 billion over 10 years. That's a fraction of the top-loaded tax cut passed early this year, which officially will cost $1.3 trillion but, according to some economists, could end up costing twice as much.
That's a lot of yacht fuel -- and a lot of money that won't be available to pay for medicines for heart disease and cancer and other medications to prevent death and curb pain and suffering.
maxcastro@miami.edu
Copyright 2001 Miami Herald
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