It's wonderful coincidence that Super Tuesday should arrive just as President Bush is unveiling his FY09 budget. After all, one of the candidates up for election in the 24 state primaries/caucuses will start the struggle with these complex and challenging issues in about a year's time.
Naturally, Bush's FY09 $3 trillion plan will see numerous changes as it makes its way through Congress over the next few months. The biggest dilemma facing the Democrat-controlled legislature is how to manage the deficit, which the White House projects to be $407 billion in FY09. The White House attempts to achieve balance by 2012 through reductions in domestic spending, including cuts in Medicare and Medicaid. Democrats will recoil at such cuts, but the other options are no more politically tenable: Massive cuts in defense spending, or a complete overhaul of the entire entitlement system (including Social Security), or letting the Bush tax cuts expire and the not fixing the alternative minimum tax (AMT) debacle.
The outcome of this debate is of great importance to NEMA's members. If Congress and the next White House opt for tax increases, American business will likely be the first target. This is not the prescription typically recommended when the economy is struggling. At the same time, as economist Robert Samuelson constantly reminds us, if our political leaders don't fix the looming Social Security/Medicare financial crisis, the next generation of American businesses and workers will have to pay 40% more in taxes to preserve the programs.
Confronting these economic and fiscal issues is not for the feint of heart. Whomever ends up in the driver's seat after today's primaries had better be up to the challenge.