How George learned to stop worrying and love the deficit

The transformation is complete. The Republican Party, once positioned as the fiscally responsible party that didn’t want the federal government spending more than it took in, has successfully turned 180 degrees.

Mitch Daniels, director of President Bush’s Office of Management and Budget, more or less made the party’s change official on Friday when he said he wasn’t worried about “the dimension of today’s deficits, and tomorrow’s for that matter.”

While I’m glad Mitch isn’t losing any sleep over this, the “dimension” of his administration’s deficits are astounding, with budget shortfalls of $400 billion possible as soon as this year and continuing indefinitely into the future. All of this is occurring just two years after President Clinton oversaw the largest surpluses in American history during the longest period of economic growth the nation has ever had.

Looking over the budget numbers, and the expected costs associated with a mushrooming national debt, got me thinking. Didn’t Bush support adding an amendment to the U.S. Constitution to require a balanced budget? Exclusive research completed by The Carpetbagger Report has concluded he did.

On August 23, 1997, Bush addressed the Midwest Republican Leadership Conference in Indianapolis. In his remarks, Bush not only implored the federal government to stave off deficit spending, he argued that writing it into constitutional stone was the best way to protect future generations of Americans.

“All Republicans believe in a fiscally sound government,” Bush said. “American families balance their budgets and pay their bills, and the federal government must do so as well. Living within our means, means better living for the families of America. Interest payments on our national debt are now our nation’s largest expenditure. What a waste of taxpayers’ hard-earned dollars. [Bill Clinton] has finally agreed to a budget that may eventually be balanced. But agreements can be broken. That’s why in Texas, we don’t just promise a balanced budget, our Constitution requires it. It works in many states and we owe it to our children to make it work in America. Our country needs the balanced budget amendment.”

Bush, just over five years ago, was unequivocal on these basics of government responsibilities. Consider his choice of words: We “owe it to our children” to have a balanced budget. We “must” balance our budgets. The “interest payments on our national debt” are a “waste of taxpayers’ hard-earned dollars.” Contrast that with President Bush’s record-high budget deficits and his administration’s assertion that they’re unconcerned about “the dimension of today’s deficits, and tomorrow’s for that matter.”

Six months earlier, on Feb. 3, 1997, Bush expressed a similar sentiment, voting for a Republican Governor’s Association resolution supporting a balanced budget amendment to the U.S. Constitution as a step “toward improving the economic prospects of all Americans, especially middle-income families and the disadvantaged.”

In other words, Bush once believed balancing the federal budget improved the economy. Now he believes deficit spending won’t affect the economy, and huge tax breaks for the wealthy will improve the economy. That’s quite a conversion in a short period of time.

Bush’s switch from fiscally responsible governing to recklessly high deficits is, in many ways, reminiscent of Ronald Reagan. It was Reagan, after all, who said on June 13, 1978, “Balancing the budget by cutting the cost of government is the Republican way.” After getting elected, Reagan went on to promise on multiple occasions that his administration would balance the budget during his presidency, that is, before he ran the largest deficits in the history of the country — at the time more than all of the other deficits ever run in the U.S. combined.

But Bush’s conversion to deficit spending was more dramatic. Reagan inherited some deficits, albeit meager shortfalls, from Carter, while W. Bush inherited record-setting surpluses from Clinton. Reagan’s deficits, while huge at the time, will be less than half of what W. Bush’s deficits will be. And worst of all, while Reagan promised rhetorically to balance the budget and failed, W. Bush actually advocated amending the Constitution to prevent the very policies he now embraces.