Bush Breaks 2004 Promise to Halve Budget Deficit
On Monday, President Bush will unveil a fiscal 2009 budget proposal that breaks yet another promise he made to the American people. The nation's first ever $3 trillion dollar budget will produce a $400 billion mountain of red ink. And with it, Bush's bogus 2004 promise to halve to the federal budget deficit by 2009 will rightly end up in the dustbin of history.
As he faced reelection five year ago, George W. Bush famously committed to cut the deficit in half by 2009. But that promise, as the Washington Post, CNN and others noted at the time, was premised upon two parallel frauds.
First, Bush's pompous prediction used as its baseline a wildly inflated White House deficit forecast of $521 billion, well above the CBO's estimate and the actual figure of $413 billion. More importantly, President Bush conveniently chose 2009 as his finish line, the year before his tax cuts were set to expire. Making them permanent (which he and all of the GOP presidential candidates endorse) would blow another $2.2 trillion hole in the federal budget by 2014. In addition, other required costs (such as the Medicare prescription drug plan) and likely federal tax code adjustments (most notably fixing the Alternative Minimum Tax) would add hundreds of billions more in red ink to the national ledger. And all of that is before the deluge of Social Security and Medicare expenditures looming with the retirement of the baby boom generation.
Nonetheless, when the budget deficit dipped last year to $163 billion, the Bush administration proclaimed victory and vindication. On its web page titled, "Fiscal Discipline: Managing for Results," the White House crowed:
"The deficit has been cut in half three years ahead of the President's 2009 goal. Historic revenue growth and a continued commitment to spending restraint contributed to this reduction."
As it turns, not so much.
The Bush administration finally fell victim to its own rosy scenario. As CBO chief Peter Orzag told Congress two weeks ago, the economic slowdown is reducing tax revenue. On top of the $70 billion in new funding for the conflicts in Iraq and Afghanistan, the budget reflects $150 billion for the economic stimulus package brokered by the President and Congress. The result is a deficit forecast in the range of $400 billion in both 2008 and 2009. So much for George W. Bush, promise keeper.
The Bush budget proposal encapsulates his presidency in countless other ways. The born-again believer in fiscal discipline tries to cap discretionary spending at $1 trillion, but at the expense of programs Congress is certain to defend. Defense spending is pegged to increase by 5%, including a doubling of funds to replace military equipment from the wars in Iraq and Afghanistan. (The $515.4 billion request for the Pentagon is a record for the post World War II era.) While slashing many education initiatives, Bush restored funding for the controversial Reading First program riddled with conflicts of interest. The petulant Bush also takes a shot a Senate Democrat Robert Byrd, zeroing out the $40 million college scholarship program named for him. And while Bush vetoed the Democrats' proposed expansion of the State Children's Health Insurance Program, the budget ups funding for S-CHIP to provide air cover for desperate Republicans heading into the 2008 elections.
Given his insistence that his tax cuts be made permanent, a demand repeated during his State of the Union address last week, President Bush in essence is promising $400 billion budget deficits as far as the eye can see. As Clinton budget director Alice Rivlin put it, Bush's legacy "from a fiscal point of view is having blown an opportunity to ameliorate the long-run budget deficits."
That's just one broken Bush promise to add to the list.
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In the 1980s, when Canada announced a record $30 billion shortfall, the public voted the entire goverment out (all but four MPs); the next government put in a 7% consumer tax, cut spending by 5% across the board, increased tax brackets, etc.; and it was nearly a generation before they let the conservatives back in power.
In the US, repeated $400 billion shortfalls can't even swing the popular vote a few percent away from the governing party?
Not Bush's fault. It's the voters who keep electing people who think the best way out of debt is to cut taxes, spend more, and hope the enconomy will turn around.
Posted by BW022 on July 28, 2008 1:19 PM