Bill Clinton, who oversaw the longest period of economic prosperity and the largest surpluses in U.S. history, was recently giving a speech in South Florida. He noted, “People ask me what great new ideas did you bring to Washington. I say, ‘Arithmetic.'”
It’s a good line, but more importantly, it’s a valuable observation about the one thing lacking in the federal government’s budget policies since Bush took over.
In case you missed it, there was a cavalcade of bad news about the federal budget in today’s papers. If you’re one of those people who gets squeamish about the fiscal nightmare the Bush White House and the Republican Congress are creating, you might want to look away.
A report from the non-partisan Congressional Budget Office estimated that this year’s federal deficit will reach almost $500 billion and that the government is on track to accumulate nearly $2.4 trillion in additional debt over the next decade.
Oddly enough, the CBO report understates things quite a bit. If Bush succeeds in getting Congress to make his multiple tax cut plans permanents, the U.S. would be looking at an addition $4 trillion in debt by 2011. When one considers the fact that the CBO ignored some added costs that we’re almost certain to incur, the ugly truth is that the federal government will spend about $5 trillion more over the next 10 years than it takes in.
Treasury Secretary John Snow said yesterday, presumably with a straight face, that the Bush administration is committed to cutting the deficit in half over the next five years. “Make no mistake, President Bush is serious about the deficit,” Snow said.
Unfortunately, Snow is lying. Bush may be serious “about the deficit,” but only if you mean he’s serious about making it considerably bigger in the short and long term. Or, as Paul Krugman put it, Bush is “at best… engaged in deficit reduction-related program activities.”
The CBO was even conservative about its spending estimates, basing its deficit forecasts on 2.5 percent increases in discretionary spending. This, of course, is fantasy. Since Bush took office, spending has grown by over 7 percent each year. Even this year, Bush said in the SOTU he’s hoping for 4 percent spending increases, though no one seriously thinks he means it, and even if he does, it’s still more than the already-chilling CBO forecast anticipates.
And the Bush White House actually wants to spend far more, with a prescription drug plan, trips to Mars and the Moon, and billions left to be spent in Iraq and Afghanistan. In addition, as Maxspeak noted, the administration will also need billions more for Social Security privatization and a missile defense system that doesn’t work.
The bill for this irresponsibility will come early in the next decade, when, as luck would have it, Baby Boomers start retiring and placing an unprecedented strain on Social Security and Medicare, which will also cost a mind-numbing fortune.
But, before you think for a second that it’s government spending that’s responsible for the current mess we’re in, Krugman does a fine job debunking this myth.
According to cleverly misleading reports from the Heritage Foundation and other like-minded sources, the deficit is growing because Mr. Bush isn’t sufficiently conservative: he’s allowing runaway growth in domestic spending. This myth is intended to divert attention from the real culprit: sharply reduced tax collections, mainly from corporations and the wealthy.
Is domestic spending really exploding? Think about it: farm subsidies aside, which domestic programs have received lavish budget increases over the last three years? Education? Don’t be silly: No Child Left Behind is rapidly turning into a sick joke.
In fact, many government agencies are severely underfinanced. For example, last month the head of the National Park Service’s police admitted to reporters that her force faced serious budget and staff shortages, and was promptly suspended.
Krugman cited a must-read report from the Center on Budget and Policy Priorities, which explains in great detail that it was Bush’s tax cuts, and not government spending, that has led to this fiscal madness.
Citing the CBO data, the Center on Budget and Policy Priorities notes:
* Federal revenues will fall to their lowest level since 1950, during the Truman Administration.
* Federal spending will be lower than in every year from 1975 through 1996 (and thus will be lower than throughout the administrations of Presidents Carter and Reagan and the first President Bush).
In explaining the shift from a large surplus in 2000 to a large deficit in 2004, the drop in revenues since 2000 accounts for more than three times as much of the fiscal deterioration as the increase in expenditures.
Now if we could only get the public to somehow be aware of this fiscal nightmare…