Since being sworn into office, President Bush has taken a projected $5.6-trillion surplus and turned it fully upside down. The latest forecast, via the Congressional Budget Office, is that the federal budget over the next decade is now $1.9-trillion in the hole. Do the math. That's a swing of $7.5-trillion in three years.
The downturn was influenced by economic recession and the costs of war, but the freefall is owed more to a rash combination of tax cuts and spending increases. For that, the President and Congress are now taking hits from all sides, and deservedly so. As the CBO numbers were released, even the conservative Heritage Foundation was there to complain. Said Heritage analyst Brian Riedl: "These budget deficits as far as the eye can see are the predictable result of a president and Congress spending taxpayer dollars with reckless abandon."
The spending increases are only half the equation, but the point is well-made. Chief executives are, above all, supposed to make the numbers add up. These don't, and the economic consequences are dire.
The deficit this year alone is now projected to reach $521-billion, a record. Just four years ago, the government registered a surplus of $236-million. The difference comes down to basic accounting: Spending is higher and income is lower. Democrats argue that the tax cuts, most of which benefit only the wealthy, are indefensible if they are charged to future generations. Republicans, or those who dare to criticize the president, argue that spending on discretionary and entitlement programs is rising much too quickly. The reality is that balancing the budget, at this point, may require both strategies.
The first step, though, is to acknowledge the damage that sustained deficits produce and the debt they leave for future generations. The president says in his new budget, to be released today, that he will cut the deficit in half within five years, but such assurances are difficult to reconcile with his political promises. He still insists on extending the current round of tax cuts, increasing defense and homeland security spending, and embarking on manned space flight and a new Medicare prescription drug benefit. The projected cost of the prescription plan has already jumped from $400-billion to $530-billion in the two months since the law was passed.
The doubts about the president's sincerity are also not helped by the revelations in a new book about his former Treasury Secretary Paul O'Neill. The book describes a meeting in which O'Neill spoke against new tax cuts, warning that deficits were moving the government "toward a fiscal crisis." O'Neill says that his statements elicited the following response from Vice President Dick Cheney: "We won the midterms (elections). This is our due."
Want a real campaign issue this election year? Ask how plunging the next generation further into debt can be justified as a form of political spoils.