Welcome to the Cato Daily Podcast for Wednesday, February 7th.

I'm Anastasia Yuglova, your host.

Today, the Cato Institute's Center for Tax Policy Studies released the February issue of the Tax and Budget

Bulletin. In the Bulletin, Cato's tax expert

Chris Edwards qualifies some of the optimism about the President's spending restraint in his 2008

budget proposal. Chris is our guest for the podcast today. 2008 budget Yes and no President Bush continues to spend an enormous amount on the Pentagon and the war in Iraq

and that's costing taxpayers over 600 billion dollars now for defense.

He does try to limit and restrain non-defense spending to some extent,

although most of his restraint occurs after 2010 when he's out of office. So he proposes some restraint but he

actually won't have the chance to follow through and actually make it happen.

But he set out to do some rather ambitious things on the domestic front.

Yeah, he proposes that non-defense, non-entitlement spending is essentially frozen over the next five years

but Bush has proposed that in

prior budgets but he's never actually followed through and vetoed any

spending bills with Congress to make sure it actually happens so he always has

optimistic budgets but then he doesn't follow through and make it happen and make the tough decisions that he needs to to restrain the budget.

Do you think that the budget will successfully curb the rapid growth of Medicare and Medicaid?

I don't see any willpower right now to take on Medicare and Medicaid.

Medicaid frankly ought to be turned into a block grant like we did with welfare reform in 1996 and the federal

outlays on that program frozen, but I don't see any will to do that right now.

President Bush has proposed some useful Medicare reforms that would reduce the long-term unfunded

obligations by 25 percent, but already Democrats on Capitol Hill are telling us that they're not interested in those reforms at all.

...