State of Union - Part 2

It's been a week so now it's time for the second installment of the series on the State of the Union address. You can see the first part here. And you can see the transcript on cnn.com

First point is the budget. Pres. Bush writes that he welcomes the bipartisan enthusiasm for spending restraint. He then goes on to say that he's going to hold discretionary spending below inflation. Finally he says that he's going to eliminate or reduce 150 government programs.

Call me skeptical, but I don't see that going though the budgetary process. Congressmen are going to keep their pet projects. One program that has been particuarly targeted is the agricultural subsidies. Like any good economist, I would much rather see the subsidies elminiated. However, the realist in me sees that midwestern congressmen, or from any part of the country for that matter, don't want to return home to their state empty-handed. So I really doubt that President Bush is going to get all of his programs cut.

What's beside the point is that most of the budgetary growth comes not from discretionary spending, but from entitlements like Social Security. We'll tackle Soc. Security in the next section, but programs like that and Medicaid are responsible for alot of the growth in the deficit.

The next topic that he talks about is education. He makes hay out of the No Child Left Behind Act, but other than that, he just talks about more spending for Pell Grants and more training for adults. But other than that, I don't think we'll be remembering President Bush as the education president.

The next topic was about ending junk lawsuits. This is probably one of the more pressing issues that faces the legal system. The problem is that the trial lawyer industry will fight any restrictions on the asbestos racket or class action civil suits to the nail. It would be one of the major victories for the administration to actually have tort reform for the legal system. Again, I don't know if the President will actually use up his politicial capital in creating tort reform.

Next he talks about his plans for health-care. There's some good and some bad in this section. He talks about medical liability reform. That's always good, since the threat of medical malpractice suits drive up the cost of health care and prescription drugs. There is a better equilibrium point rather than the system that is in place now. The bad is his idea to put a community health care center in every poor county and tax credits for low-income people when they buy health insurance. The community health care centers is just another step toward complete-government provided health care, and we all know how bad government provided health care is. Just ask the Canadians waiting in line for their surgeries. Tax credits is just another targeted welfare program for the poor.

President Bush is not going to be confused as an environmental president. So when the President starts referring to Ethanol as renewable energy, you know he's not exactly on top of the issue. It would be nice for America to be less dependant on foreign sources of energy, but that's not going to happen anytime soon. Of course, as soon as we stop getting Middle East oil, the sooner that we can stop caring about what happens in that region. But President Bush isn't about to say that. There are plenty of despots out there in Africa that we don't care about, but because they don't provide us with oil, we're not about to invade their country. Then again, they're not invading their neighbors, who also have oil, and trying to develop nuclear weapons either. So in short, it would be nice if we could just come up with our own energy sources, but that will only come when the price of oil becomes too expensive and other avenues become more economically viable.

The President mentions reforming the tax code. As I've mentioned before, I would much rather see a consumption tax in place. But even that would probably be subject to special-interest loopholes. So I have little faith that the bipartisan group working on the income tax will come up with anything viable that will make the tax code, simpler and easier to file.

Finally, the President mentions immigration reform. One comment that really interested me is "It is time for an immigration policy that permits temporary guest workers to fill jobs Americans will not take, [and] that rejects amnesty." You know what, why are there jobs that Americans will not take? Maybe it's because there is an overly generous welfare system that creates an alternative to working. Maybe we should change that before we start opening the doors to immigration. Then as for rejecting amnesty, I find this really funny since it was the President himself that suggested amnesty in the first place. Amazing what an election will do. Pre-election, he proposes amnesty to gain pro-immigrant votes, but then repudiates this to gain support of conservatives. I'm not sure if this has riled up his opponents, but I figure it would.

In any case, this was a "safe" economic program. Nothing to earth-shattering, nothing that will inflame one side of the aisle or the other.