As you no doubt know by now, President Bush, who at one time supported a constitutional amendment to prohibit deficit spending, has racked up more debt than any president in U.S. history.
Upon taking office, Bush enjoyed the fruits of Clinton’s labor. Bush was handed a $236 billion surplus, the largest surplus in the nation’s history. Since then, Bush has run deficits in every year of his presidency, each bigger than the last, with this year’s deficit reaching over $400 billion, and next year’s expected to reach $500 billion.
Aside from laughable suggestions such as Dick Cheney bragging that he and Bush are “deficit hawks,” there’s a mysterious plan that the administration has been emphasizing repeatedly for months.
“The administration’s plan to cut the deficit in half is a combination of strong economic growth and spending restraint,” Trent Duffy, spokesman for the White House Office of Management and Budget, said in August.
White House Press Secretary Scott McClellan said on July 15, “[O]ver the next few years, what you’re going to see is that we’re going to cut that deficit in half.”
Bush said on Aug. 22, “[W]e’ve got a plan to reduce the deficit in half in five years.”
That’s great, right? I mean, Bush had a plan to maintain surpluses and pay “down an unprecedented amount of our national debt” as recently as two years ago, but never mind all that. Now the administration that has run up more debt than any of its predecessors has a plan to cut the deficits that they created in half.
Oh wait, no they don’t.
It turns out “plan” was never really the right word. What administration officials meant is that budget estimates suggest that by 2008, with strong economic growth, limited federal spending, no new tax cuts, and no new wars, the deficit will return to about $200 billion by 2008.
Of course, that isn’t really a plan to cut the deficit in half; it’s more of a plan to wait around and hope for things to get better. Hope, however, is not a plan.
Is any of this realistic? Absolutely not. In fact, Richard Kogan, a former Director of Budget Policy for the U.S. House and now a scholar at the non-partisan Center on Budget and Policy Priorities, has prepared a thorough review of the administration’s “plan” to reduce the deficit. His findings are startling. Not surprisingly, Kogan explained that Bush’s claim “does not withstand scrutiny.”
“Realistic ten-year budget projections that are based on the Congressional Budget Office budget estimates issued on August 26, and that reflect likely or inevitable costs, show a deficit in 2008 as high as or higher than the deficit in 2003,” Kogan said. “[The administration’s] projections show a large decline in the deficit by 2008 only because the OMB figures omit a series of very likely or inevitable costs in taxes, defense spending, and other areas.”
How does the administration play this trick? First, Bush’s estimates assume that the U.S. will not spend a penny on Iraq or Afghanistan beyond next year (which flatly contradicts the White House’s own “Future Year Defense Plan,” which anticipates expenditures in both countries for several years to come). Indeed, the same estimates that Bush and the rest of the White House have been relying on don’t even include the $87 billion Bush just requested for war costs.
Second, the administration is counting on no new changes to the nation’s tax structure, which no one believes will happen.
And lastly, the White House has wildly unrealistic expectations for government spending. In order for its so-called “plan” to effectively cut the deficit in half by 2008, the federal government will have to spend less on domestic appropriations on such things as homeland security, education, transportation, biomedical research, law enforcement, veterans’ medical care, and the highly-touted prescription drug benefit for seniors. Raise your hand if you think that’ll happen.
Ultimately, Kogan not only reject’s the Bush administration’s projections, but believes the opposite is likely to occur.
“A more realistic projection shows the deficit rising from $401 billion in 2003 to approximately $460 billion in 2008, and then climbing further to approximately $650 billion in 2013,” Kogan said.
He concluded, “[T]he administration’s contention that the deficit will be cut in half in the next five years is essentially an accounting fiction, derived in substantial part by omitting very likely or inevitable costs, including costs for proposals the administration itself intends to submit in the years ahead.”