The Fiscal Legacy of George W. Bush
held senior policy roles in the Reagan and George H.W. Bush
administrations and served on the staffs of Representatives Jack Kemp
and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
Republicans assert that Barack Obama assumed sole responsibility for
the budget on Jan. 20, 2009. From that date, all increases in the debt
or deficit are his responsibility and no one else’s, they say.
This is, of course, nonsense – and the American people know it. As I documented in a previous post,
even today 43 percent of them hold George W. Bush responsible for the
current budget deficit versus only 14 percent who blame Mr. Obama.
The American people are right; Mr. Bush is more responsible, as a new report from the Congressional Budget Office documents.
January 2001, the office projected that the federal government would
run a total budget surplus of $3.5 trillion through 2008 if policy was
unchanged and the economy continued according to forecast. In fact,
there was a deficit of $5.5 trillion.
The projected surplus was
primarily the result of two factors. First was a big tax increase in
1993 that every Republican in Congress voted against, saying that it
would tank the economy. This belief was wrong. The economy boomed in
1994, growing 4.1 percent that year and strongly throughout the Clinton
that emerged in 1998 was tough budget controls that were part of the
1990 and 1993 budget deals. The main one was a requirement that spending
could not be increased or taxes cut unless offset by spending cuts or
tax increases. This was known as Paygo, for pay as you go.
During the 2000 campaign, Mr. Bush warned that budget surpluses were
dangerous because Congress might spend them, even though Paygo rules
prevented this from happening. ...
Putting all the numbers in the C.B.O. report together, we see that
continuation of tax and budget policies and economic conditions in place
at the end of the Clinton administration would have led to a cumulative
budget surplus of $5.6 trillion through 2011 – enough to pay off the
$5.6 trillion national debt at the end of 2000.
Tax cuts and
slower-than-expected growth reduced revenues by $6.1 trillion and
spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of
this total, the C.B.O. attributes 72 percent to legislated tax cuts and
spending increases, 27 percent to economic and technical factors. Of the
latter, 56 percent occurred from 2009 to 2011. ...
Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.
Conversely, they are adamant that tax increases must not be part of any deficit-reduction package because they never reduce deficits
and instead are spent. This is also ridiculous, as the experience of
the Clinton administration clearly shows. The new C.B.O. data confirm
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