Lori Montgomery, Running in the Red: How the U.S., on the road to surplus, detoured to massive debt, Washington Post, April 30, 2011, notes that the run-up of the U.S. debt was a choice, made in the first year of the Bush Administration when Bush pushed through a huge tax cut.
Rubin wanted to use the surplus to start repaying the debt, which was then just more than $3 trillion. The White House billed it as “saving Social Security first,” viewing the surplus as an opportunity to shore up the nation’s finances before huge numbers of the baby boom generation began claiming federal retirement benefits. “The problem was a whole other part of the political spectrum wanted to use the surplus for tax cuts,” Rubin said in an interview. “They said they wanted to give the people back their money. Of course, it was also the people’s debt.”
The Bush tax cut bills passed almost every year he was in office (and the additional losses in tax revenues triggered by recession) are "the biggest culprit, by far" behind the huge increase in the debt that the right is trying to use to convince Americans that we have no choice but to settle for decimating almost all of the New Deal programs. The 2001 and 2003 Bush tax cuts amounted to about $1.8 trillion (based on the sunsetting gimmick that had various provisions ending after 8 or 10 years to make the cost look lower than it was expected to be).
Many Americans seem to think that Obama is the source of the high deficit/high debt problem. But Montgomery shows that most of the big ticket spending increases go back to the Bush administration.
Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.
Obama’s 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.
Montgomery reports that Republicans (who were the drivers of the huge Bush-era series of tax cuts) "reject raising taxes as part of the solution."
But Montgomery's story is, like most reporting these days, too shallow. She notes that Bush's campaign talk about "giving the tax money back to the people, because 'It's your money'" took place in the context of the surplus generated during the Clinton years. But now they plan to use the need to raise the debt ceiing as leverage to force the Democrats to accept cuts to entitlements while still giving major new tax cuts to the wealthy and big business.
The article suggests that, if only Bush and Congress had known about the two wars and the heightened security costs after 9/11 and the financial crisis, they would not have passed the gigantic tax cuts. Pete Domenici, for example, says "Nobody would have thought that all these things would have happend after you cut taxes. That you'd have two wars and not pay for them. That you'd have another recession. A huge extravaganza of expenditures."
Yet it was the same president Bush who pushed through the huge tax cuts year after year who chose to start two wars that had little to do with U.S. security and lots to do with the military industrial complex and Republican war-mongering ideology. And then chose to pay for those wars with borrowing rather than by rolling back the bills that had starved the government of tax revenues at just the wrong time. And Congress went along.
But even that distorts the perspective on the Bush tax cuts and the surplus. By the time the 2002, 2003, and 2004 tax cuts were passed, we already knew that there wasn't a surplus. Bush was running significant deficits, and the wars in Iraq and Afghanistan were mushrooming well beyong the rosy low-cost estimates that the Bush war machine had first projected. The war funding was being handled by supplemental bills to disguise its huge cost. So those tax cuts were passed in spite of the deficits and hugely increased borrowing to pay for the Bush-Cheney permanent ramp-up of the military complex, including the expensive hired mercenaries and hired Halliburton services that proved that privatization of the military resulted in increased costs. The way the tax cuts were handled, and the way the right-wing rhetoric disguised the reality of the need to borrow to pay for tax cuts while conducting a war of choice, demonstrates that the GOP is not the party of fiscal responsibility that it tries to claim it is.