President Obama’s agenda is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying. The New York Times analyzed Congressional Budget Office reports going back almost a decade …January 2001, The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years …
(Reason 1) 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.
(Reason 2) 33 percent of the swing stems from new legislation signed by Bush … 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.Here is where the dire warnings about how Obama’s uncontrolled spending will destroy American as we know it, letting it wither on the vine.
So what about the Republican solution?
(Reason 3) 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 Bush and supported by 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. If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.
How can that be? Some of his proposals would be partly offset by proposed tax increases on the affluent and spending cuts. Even if a health overhaul does pass, it may not include the tough measures needed to bring down spending. Ultimately, the only way to do so is to take money from doctors, drug makers and insurers, and it isn’t clear whether Obama and Congress have the stomach for that fight. So far, they have focused on ideas like preventive care that would do little to cut costs.
Sen. Judd Gregg recently held up a chart on the Senate floor showing that Obama would increase the deficit — but failed to mention that much of the increase stemmed from extending Bush policies. In fact, unlike Obama, Republicans favor extending all the Bush tax cuts, which will send the deficit higher. Republican leaders in the House, meanwhile, announced a plan last week to cut spending by $75 billion a year. But they made specific suggestions adding up to meager $5 billion. The remaining $70 billion was left vague. “The G.O.P. is not serious about cutting down spending,” the conservative Cato Institute concluded. The solution … will involve some combination of tax increases and spending cuts.
And since we already know that the Republicans will not increase taxes, a solution from the party of NO is so much hot air.