Here are some facts. As the new U.S. fiscal year began on Oct. 1, we are facing a $1.3 trillion budget deficit. We are entering our third year of measuring this deficit in the trillions. Until the final years of President George W. Bush’s administration, it was always in billions. I don’t think I ever used the word “trillion” until 2008.
How did we get to a $1.3 trillion deficit? In 2001 and 2003, Congress passed the Bush tax cuts. In 2001 we went to war in Afghanistan. In 2003, we went to war in Iraq. And in 2004, Congress passed the Medicare prescription drug plan. None of these things were ever paid for. President Bush and the Republican-controlled Congress put them on the federal credit card, payable by our children. This coincides with massive slices of Baby Boomers retiring.
Retiring U.S. Sen. Evan Bayh noted in March 2009 that, “Our nation’s current fiscal imbalance is unprecedented, unsustainable and, if unaddressed, a major threat to our currency and our economic vitality.”
Last February, President Obama said “our fiscal situation remains unacceptable,” even as he pursued an ambitious domestic agenda as well as an expanded war in Afghanistan. He explained that, “Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century.”
U.S. Rep. Mike Pence said on NBC’s Meet the Press in August, “The deficit this year is a trillion dollars for the second year in a row. The American people have had it with runaway federal spending, deficits and debt, and they want to see men and women in Washington, D.C., make the hard choices.”
U.S. Sen. Dick Lugar, in making a case against extending unemployment benefits last July explained, “Adding tens of billions of dollars to our national debt and risking higher interest rates and future taxes does not represent a responsible pro-growth policy.”
Yet, both parties are pandering to your vote this November when it comes to extending the Bush tax cuts. Republicans called in their “Pledge to America” the renewing all of the Bush tax cuts, including the richest three percent of taxpayers. The non-partisan Congressional Budget Office says this will add nearly $4 trillion to budget deficits over the next decade.
President Obama and Congressional Democrats favor extending the Bush tax cuts to all but the top three percent of wage earners – those making more than $250,000 a year. The CBO estimates this will add $2 trillion to the deficits over the next decade.
Former Fed Chairman Alan Greenspan said in August, “At the end of the day, that’s disastrous.” Robert Bixby of the non-profit Concord Coalition, which advocates balanced budgets, told the Washington Post, “Both parties are being disingenuous here. When I hear the Democrats saying Republicans are willing to add to the deficit, well, the Democrats are willing to add $2 trillion to the deficit themselves.”
Recently departed White House Budget Director Peter Orzag said on CNN earlier this month on balancing the budget, “If we actually ended the Bush-era tax cuts, that would pretty much do it. If you do a bit on the spending side and then end the tax cuts, you pretty much get there.”
Earlier this month, I asked Gov. Daniels if there was an inherent contradiction between Republican calls for fiscal responsibility and the Bush tax cuts. He responded, “What you’re asking is if we should raise taxes on anyone. Of course not. The tax consequences would land on small business and that’s a bad idea. We should grow the economy.” This is from the mouth of the White House budget director on hand when the first Bush tax cuts were enacted.
We are watching most Republicans and even Democrats like Senate candidate Brad Ellsworth reframe this dilemma to the here and now. But let’s go back to the CBO, which in a Washington Post story earlier this month predicted that the economy would be stronger with the cuts, but only through 2012, when the extra borrowing they require “would reduce or ‘crowd out’ investment in productive capital.”
The Bush tax cuts have been a political football because the key players – from Obama to Pence – are gaming you, knowing you’ll want the candy even though we all know of the tooth decay to follow.
Not a single Republican or Democrat can cite credible off-setting cuts. To do that, you get into entitlement reform involving Social Security, Medicaid and Medicare. And no one has the guts to play it straight with us.
Folks, were you born yesterday? Are there fools being born every minute? Don’t you realize we’re all being taken as election year chumps?
I’ll end with another time-worn saying: People usually get the government they deserve.
(The columnist publishes at www.howeypolitics.com)