When President Bush was inaugurated, the fiscal health of the country couldn’t have been much better. Economic growth was strong, unemployment was low, and budget deficits were a thing of the past as the nation enjoyed the highest surpluses in history. An enormous national debt of $3.4 trillion, built up through the 1980s, was on track to be eliminated once and for all.
As the LA Times’ Ron Brownstein noted in January, “When Bush took office, the nonpartisan Congressional Budget Office said Washington would eliminate the publicly held national debt by 2008 — as long as the government fulfilled the pledge Bush…made in the 2000 presidential campaign to apply the surplus temporarily accumulating in Social Security toward paying down that debt.”
In 2001, Bush seemed to agree we were on the right track. “We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years,” Bush said, adding, “That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history.”
If Bush had kept that promise, the U.S. would have been entirely debt free, for the first time in over 170 years, by 2008. The burdensome payments made each year on the national debt’s interest (currently over $220 billion) would soon disappear.
Looking over today’s headlines shows how much progress Bush has made on economic issues.
The New York Times, among many others, reported that the U.S. “suffered job losses in February that were the worst since the two months after the Sept. 11 terrorist attacks,” and the unemployment rate is up to 5.8 percent. This news comes almost exactly a year after Bush, in his 2002 State of the Union address, said, “When America works, America prospers, so my economic security plan can be summed up in one word: jobs.”
The same article quotes John Snow, Bush’s new Treasury Secretary, as saying the poor employment news should lead Congress to pass more tax cuts, as proposed by the president. “Today’s news underscores the need for us to act now,” Snow said. It’s an unusual argument since the tax cut plan includes billions in cuts for future years and is widely believed to have little if any stimulative benefits for the short term.
The news on the budget was even worse. After promising we could cut taxes, endure a national emergency, increase defense spending, expand Medicare, protect Social Security, pay down the debt and still maintain a balanced budget, the cold facts have made plain just what a charade Bush’s budgets have been.
As the Washington Post reported today, the budget deficit will reach $246 billion this year and reach record highs next year. This does not include the costs of an almost certain war in Iraq or the many new tax cuts Bush hopes to pass this year. If war is waged and Congress passes Bush’s tax cut plan, the deficit could be nearly $400 billion this year, far exceeding the $290 billion record set by his father in 1991. All told, the national debt Bush promised to retire permanently will likely rise to over $5 trillion in the coming years.
At the risk of being overdramatic, the president is setting us up for a fiscal train wreck of historic proportions. The deficits, according to the Bush administration, will likely continue to grow over the next decade, all the while raiding the Social Security “lockbox.” The administration has further explained that the debt will skyrocket, as will annual interest payments. In 2012, after Bush has handed off his mistakes to someone else, the baby boom generation will begin retiring, placing unprecedented pressure on Social Security, Medicare and Medicaid, and we’ll have done nothing to prepare for this pending crisis, despite having seen it coming for years. All the while, Bush has laid the groundwork for an unparalleled military buildup, including a ridiculous “missile defense initiative” that doesn’t work, which would ultimately push military spending to average $428 billion a year between 2008 and 2020 in inflation-adjusted dollars, which will be more, as a percentage of GDP, than we spent at the height of the Cold War.
Put simply, the nation just can’t afford what Bush is recommending. It makes Bush’s recent declaration that we can’t “pass along our problems to other generations” a cruel joke.