BLAME WHERE BLAME IS DUE…. David Leonhardt has a good NYT item today on the national debt, but on the Times’ home page, the teaser graf reads, “In the debate about how the government racked up so much debt, there is enough blame to go around.”
That sounds even-handed, but reading Leonhardt’s article, it doesn’t quite reflect the truth.
In 2001, Clinton left office with some of the largest surpluses in American history. The dreaded Debt Clock was shut down, because it hadn’t been programmed to run backwards. We were paying off the nation’s debt for the first time in generations. Bush was not only a proponent of a Balanced Budget Amendment to the Constitution, but he assured voters that he could cut taxes and not run deficits.
It seems almost comical in hindsight.
When Bush took office, the projections from the Congressional Budget Office showed $800 billion a year in surpluses from 2009 to 2012. Now, it’s a $1.2 trillion annual deficit in those years. What’s behind the $2 trillion swing?
The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.
Despite all of this reality, the right is just astounded by Obama’s fiscal recklessness. Please.
This is important for a couple of politically salient reasons. First, Republicans on the Hill, who cheered on Bush’s budget policies for eight straight years, have decided that talking about Obama’s budget deficits is the single most effective attack in the GOP rhetorical arsenal. It’s as if the entire Republican Party just slept through 2001 to 2009, and can’t begin to realize why these criticisms are ridiculous.
And second, while these budget shortfalls are certainly not President Obama’s fault, they are just as clearly his problem. Add it to the list of “inherited situations.”