With economy foundering, President Bush keeps pushing for foreign aid

The speech drew little attention in the midst of the presidential campaign news and the continued turmoil in the stock markets.

But with Americans struggling to pay bills and concerned that their jobs will disappear along with their retirement savings, President Bush is holding strong to his belief that whatever economic problems the United States is facing at the end of his term, the nation must put aside money for foreign assistance.

It's a tough battle, and it comes up against what pollsters regularly discover: Americans consistently vastly overstate the amount of foreign aid the United States dispenses and, in particular, the percentage of the federal budget that it represents.

So, here it is: Foreign aid amounts to less than 1% of the federal budget, and, according to the Center for Global Development, about two-tenths of 1% of national income, as of 2005.

Speaking at a White House conference on international development last week, Bush put it this way:

During times of economic crisis, some may be tempted to turn inward--focusing on our problems here at home, while ignoring our interests around the world. This would be a serious mistake. America is committed--and America must stay committed--to international development for reasons that remain true regardless of the ebb and flow of the markets.

The Washington Post took note of Bush's speech. It reported that the United Nations had figured that even before the market went south, higher food prices meant that 925 million people faced chronic hunger.

-- James Gerstenzang

Photo: Ariana Cubillos / Associated Press 

Show me the money: What happened to Bill Clinton's budget surplus?

When President Clinton left office, the federal budget was showing a $127-billion surplus.

The books are closed on fiscal 2008. The surplus the current President Bush inherited has turned into a record deficit: $455 billion.

That is more than twice the 2007 deficit of $162 billion and beyond the previous record of $413 billion in 2004.

But records are made to be broken.

While Barack Obama or John McCain will submit the next federal budget weeks after Inauguration Day, it will be largely drawn up by Bush's aides.

And regardless of who is inaugurated, as the country copes with the worst financial crisis since the Great Depression, the deficit is only expected to grow, our Los Angeles Times colleague Richard Simon reports in today's Times.

As the election campaign closes, look for the deficit report to figure in the debate -- and to add fire to House Democrats' efforts to pass another economic stimulus package to the tune of $150 billion.

-- James Gerstenzang

Photo: President Bush and President Clinton on inauguration day 2001. Credit: Shaun Best / Reuters

The bailout bill asks: When is pork politically kosher?

On the subject of pork-barrel spending, President Bush was adamant at the start of the year: It had to end.

He threatened vetoes. He said there would be no more dark-of-night legislation hiding the "earmarks."

He told the Conservative Political Action Conference in February:

Last month I issued an executive order that directs federal agencies to ignore any future earmark that is not actually voted on by the United States Congress. This executive order will extend beyond my presidency. It will stay in effect unless revoked by a future president. What that means is any president who wants to return to the old ways of unaccountable and wasteful spending will get to do so publicly. And if that happens, that president will have some explaining to do.

Until, of course, the projects show up in a bill the president really, really wants.

So, here's a classic Washington lesson:

There is no bill Bush wants more right now than the $700-billion credit-market-economy-stabilizing-bailout-rescue-whatever-you-want-to-call-it-as-long-as-you-vote-for-it bill pending before the House.

What's in it?

Let's take a peek, courtesy of our Los Angeles Times colleague Richard Simon:

-- Legislation that, for insurance purposes, equates mental and physical illnesses. It's a priority of Rep. Jim Ramstad (R-Minn.). He voted against the bill on Monday.

-- A tax benefit for bicycle commuting. That's favored by Rep. Earl Blumenauer (D-Ore.). He voted against the bill on Monday.

-- Extension of the solar tax credit. Rep. Gabrielle Giffords (D-Ariz.) has said she wants to make Arizona the "Silicon Valley of solar energy." She voted against the bill on Monday.

-- Extension of the research and development tax credit that is important to the high-tech industry, and to Rep. Jay Inslee (D-Wash.), whose state is home to Microsoft. He voted against the bill on Monday.

-- Extension of a measure that allows residents of states without state income taxes -- Texas, Florida, Washington, Nevada, South Dakota, Wyoming and Tennessee -- to deduct sales taxes from their federal income tax liability.

-- Extension and expansion of tax breaks to promote energy conservation and renewable energy. Rep. Mark Udall (D-Colo.), co-chair of the House Renewable Energy and Efficiency Caucus, favors it. He voted against the bill on Monday.

And don't forget tax breaks for Hollywood studios, to encourage them to film in the United States, and for manufacturers of wooden toy arrows.

In other words, plenty of pork.

Deputy White House Press Secretary Tony Fratto acknowledged the president's many statements decrying hidden earmarks. But, he said, such purity is just not possible during a crisis:

I think it's probably impossible to have that kind of standard on every single bill, but remember that we are facing a crisis and the core of this bill is critically important for our economy. We keep saying it. We don't want to take extra days to deal with this.

Suddenly, pork is politically kosher.

-- James Gerstenzang

Photo credit: Joyce N. Boghosian / The White House 

Under President Bush, how many more of these does the U.S. owe?

It's time for a two-question quiz:

Question No. 1: By how much has the national debt grown under President Bush?

Is it a.) $1 trillion? b.) $2 trillion? c.) $3 trillion? d.) $4 trillion? e.) More than $4 trillion?

(Remember: We're not asking how much is the national debt; just by how much it has increased).

Question No. 2: Under which of the 44 presidents has the debt grown the most?

Answers: It has grown by more than $4 trillion under Bush--and that's more than under any previous president.

We can thank Mark Knoller, a White House correspondent for CBS News, for doing the not-so-complicated math.

On CBS News' Couric&Co. blog, he points out that when Bush took office, the national debt was $5.727 trillion. The Treasury Department's most recent account says it has hit $9.849 trillion.

"That's a 71.9% increase on Mr. Bush's watch," Knoller points out.

And along comes the bailout--which at least for the time being could add hundreds of billions of dollars to the debt-if ever approved. (Bush said this morning "much if not all" would be paid back. But with the House's rejection of the plan a few minutes ago, even that may be moot.)

But just in case, Knoller notes, the bailout legislation contains this provision: The debt ceiling can go as high as $11.315 trillion.

-- James Gerstenzang

Photo: U.S. Department of the Treasury

Remember President Bush's strong economy? Now it's strong enough

It has been the mantra of the White House this summer: Yes, there is pain, but the fundamentals of the economy are strong.

Today, the mantra underwent an ever-so-slight rewrite.

In effect, the new message goes like this: The fundamentals are strong enough.

White House Press Secretary Dana Perino was asked whether it was still accurate to say "the economic fundamentals are strong."

It's a "very mixed picture right now, and no doubt we're going through some challenging times," she said -- noting that productivity was up, but so too was unemployment. But overall "we are in a position of strength to be able to deal with this crisis."

So, does that mean the economic fundamentals are still sound?

Presenting neither a "yes" nor a "no," she said: "We have the strength to be able to deal with this crisis in our economy."

Pressed, she said, "I answered the question."

Indeed. And the language has changed.

-- James Gerstenzang

Photo: Richard Drew / Associated Press

With highway money running out, President Bush pulls a U-turn

Earlier this year, the U.S. government's highway trust fund -- which pays for large highway projects across the country -- was projected to run low in 2009. But President Bush threatened to veto legislation that would have bailed it out with general tax money.

An administration statement called legislation to make the transfer  "a gimmick and a dangerous precedent" that would "unnecessarily increase the deficit."

But now, even before 2009, the highway fund is running out of money faster than expected back then, and the administration has made a political U-turn, the Los Angeles Times' Richard Simon reports. It is asking Congress to speedily approve an $8-billion rescue plan.

"At current spending rates," Transportation Secretary Mary Peters said today, "we will start the new fiscal year on Oct. 1 with a zero balance in the trust fund, and will continue to spend more than we take in."

She said in a conference call with reporters that the problem is so urgent that Congress needs to send legislation to the president by ...

Umm, Russia, about those missing Humvees...

Maybe the Russians can help President Bush cut into the federal deficit?

When they moved into Georgia earlier this month, Russian soldiers confiscated five U.S. Humvees that were being shipped to the Georgian military as part of an American training program. They were apparently taken at a port awaiting shipment inland.

Most of the U.S. military trainers in Georgia were Marines, and Gen. James T. Conway, the commandant of the Marine Corps, was asked at a Pentagon news conference Wednesday what he intended to do about the Russian capture.

"I think we're going to send the Russians a bill and tell them, you know, 'Either pay up or give us back our vehicles, guys,'" Conway said.

Total value? About $540,000.

-- Peter Spiegel

Photo of Humvee in Baghdad: Carolyn Cole / Los Angeles Times

President Bush and Dick Cheney: Closet liberals?

And now for something completely different: President Bush, yes, this President Bush--as a liberal.

The Canadian magazine Macleans is making that argument, under the shocking headline "The shockingly liberal legacy of George W. Bush."

The irony that it misses: Could it be that Vice President Dick Cheney is the force behind at least one element of the "liberalization?"

In a lengthy article that addresses the breadth of the Bush presidency and notes that the administration's legacy is more than just the war in Iraq, it says: "In some areas it is the result of hard-line conservative ideology — but in others it is surprisingly liberal."

Consider the seeming contradictions: The tax-cutting conservative who ...

Cuts likely as President Bush falls short of Peace Corps goal

Six years ago, President Bush outlined a plan that would double the size of the Peace Corps by fiscal 2007 — to 14,000 volunteers.

It hasn't happened.

Bush will leave office roughly 6,000 volunteers short of that goal, according to today's Washington Post. Economic pressures are forcing the agency begun by President John F. Kennedy in 1961 to trim back on new volunteers, recruiting offices and other costs.

Two of the culprits: The value of the dollar is sinking against other currencies, and energy costs are going up.

But a budget standoff between the White House and Democrats running Congress may be contributing to the problem — because it may force the Peace Corps to operate under its current budget if final budget votes are not conducted until after Bush leaves office.

The Post reported that the Peace Corps, with a $330.8-million budget, faces an expected shortfall of $18 million this fiscal year and next.

The falling value of the dollar increases the cost of overseas leases, living costs for the volunteers, and foreign staff salaries — most of which are handled in local currencies.

"Tough budgetary decisions must be made now in order to ensure a financially healthy agency next fiscal year," Peace Corps Director Ronald A. Tschetter wrote to Rep. Betty McCollum (D-Minn.), of the House Appropriations Subcommittee that overseas Peace Corps funding, the paper reported.

-- James Gerstenzang

Photo: President Kennedy hands the pen used to sign the Peace Corps Act in 1961 to R. Sargent Shriver, the first director of the Peace Corps. Credit: Corbis