BLAMING BUSH FOR DEFICIT IS DISINGENUOUS

BY CINCINNATUS

Today’s deficit figures from both the White House and the Congressional Budget Office are not pretty. In fact, they are record-setting. The administration’s report projects the 2009 deficit at $1.58 trillion. That figure jumps to a staggering $9 trillion over ten years, though projections that far out are often unreliable. This is an unequivocal financial quagmire for the Obama administration, which at this very moment is seeking to push through healthcare reform legislation that could cost an additional $1 trillion over ten years, with no sustainable source of funding yet identified.

When George W Bush left office in January of this year, he bequeathed a deficit of $1.3 trillion to his successor. The size of that deficit was largely due to the $700 billion federal bailout legislation that the Bush administration supported, without which he would likely have ended on a still mammoth but much more manageable $600 billion deficit figure.

The reaction on the part of Obama’s supporters has largely been according to formula: the record-high Obama deficit is Bush’s fault. House Budget Committee Chairman John Spratt put it this way: “Today's deficits are a legacy of the Bush Administration and of the worst recession since the 1930s, which began in December 2007 on the watch of President Bush. Most of this year's deficit is a carry-over from his administration.” With all due respect to Congressman Spratt and his Democratic colleagues, this argument is disingenuous and, quite frankly, immature.

If we are to blame the $1.3 trillion Bush deficit that Obama inherited for the $1.58 trillion figure now projected, we have to wonder what the president would have done differently to have started his administration on a more financially sound note. The fact is that, as a United States Senator, he voted in favor of the $700 billion federal bailout that made up the lion’s share of the Bush budget deficit he now decries. His ardent support of the $787 billion stimulus package earlier this year further demonstrates that he is more than willing to double down on even more wasteful, bailout-style spending on the federal level. His administration and his party also support the continuation of another big ticket budget item from the Bush era: prescription drug benefits.

While the president never misses an opportunity to point out the fiscal negligence of the Republicans during the Bush administration, he and his party have had ample opportunity to prove themselves equal to or worse than their predecessors in the realm of economic policy and crafting a responsible budget. The new deficit figures are irrefutable proof that they have outdone Republican largesse without breaking a sweat. And even in the face of a staggering $1.58 trillion deficit they show no signs of backing down on healthcare reform that, as the president fallaciously claims will be deficit neutral, you can be sure was not included in the recent figures.

The country has outgrown whatever taste it had for Bush-bashing and, amazingly, expects an administration promising change to reverse whatever fiscal backsliding it continues to accuse its predecessors of. The president and his party need to stop laying the blame at the feet of Bush and man up. We want solutions to our fiscal problems, not excuses and additional problems.

PROMISES, PROMISES

BY CINCINNATUS

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Liberals rail against trickle-down economics as starving the middle class while lining the pockets of the wealthy, but the policies of the Obama administration have proven to be little more than a new kind of trickle-down economics, with the money (our money) being doled out to the political elite in Washington rather than the wealthy on Wall Street and, supposedly, showered back down upon us commoners in the form of services and subsidies. But if conservative trickle-down economics is as bad as its critics claim, then liberal trickle-down economics is an unholy disaster. The reason is that businesses have to pay their employees and put money in their investors’ pockets, they have to provide competitive services, and they have to turn a profit to survive. Government doesn’t have to do any of these things. In fact, it seldom does. So when do regular Americans feel the trickle? The answer is simply, we don’t, because Washington will never turn on the faucet.

Our heads still pound from the hangover of an impotent $787 billion stimulus package, and now we are faced with talk of health care reform that could total $1 trillion over a ten year period if passed today. Meanwhile, the recession is still keeping Americans out of work and drastically streamlining their individual and family budgets. Regardless, government continues to grow and spend with little regard to the fiscal discipline regular Americans have had to learn the hard way. This is unsustainable, and the president knows it.

Conservatives at large and this blog in particular (see here) have been saying it since President Obama was just President-Elect Obama. With the big-government agenda of this liberal administration, there is no way they can avoid raising taxes without risking financial ruin. Nevertheless, Barack Obama promised that the cornerstone of his presidency would be insulating the middle class from economic hardship by refusing to raise taxes on any American earning less than $250,000 a year. His exact words were:

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"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

It’s sounding more and more like President Obama is bracing the public for a broken promise. Treasury Secretary Timothy Geithner said yesterday on “This Week” with George Stephanopoulos that "we’re going to have to do what’s necessary” to bring down deficits. Stephanopoulos pressed Geithner several times on the president’s tax hike pledge and each time the Treasury Secretary refused to take the option of raising taxes on the middle class off the table. Larry Summers, the National Economic Council Director, made similarly ominous statements in response to the same question. Said Summers, “There is a lot, though, there is a lot that can happen over time. It's never a good idea to absolutely rule things out no matter what.”

Does this mean the administration plans to go the way of George Bush in 1990 and break its vow on taxes? Not necessarily. In fact, I would be surprised if it did. What it does mean, however, is that the administration recognizes economic reality and knows that someone is going to have to foot the bill for its reckless spending spree. These simultaneous and suspiciously similar comments by Geithner and Summers are most likely trial balloons floated by the administration to gauge public reaction to the possibility of a middle class tax hike. It’s even more likely that the administration plans to let talk of such a tax hike circulate until the mood is such that the American people will breathe a gracious sigh of relief when President Obama, ever the savior, instead proposes a tax hike on the wealthiest tax bracket, sparing the middle class from such a burden.

Let’s be clear: President Obama knows that to break his promise would be political suicide. His sights aren’t set on the middle class, but rather the wealthy and corporations. His track record speaks clearly. But a tax hike on these segments of society would be just as disastrous economically as a middle class tax hike would be politically. A recession that, according to the administration, is just turning the corner despite continuing high unemployment, may be prolonged or even worsened by higher prices, lower wages and yet more layoffs when the highest earners are forced to shell out more on top of their already heavy obligations. But hey, it's a small price to pay for us to get another four glorious years of President Obama in 2012.