The Scum at the Top
Commentary on the Rats in Washington
Big spenders: Bush & Co. remortgage nation
StarTribune
© November 29, 2003
Page A24
Someone recently called President Bush "the mother of all
big spenders." It wasn't Howard Dean or any of the other
Democratic presidential candidates. It wasn't a Democratic
member of Congress. It was fiscal analysts for the
conservative-libertarian Cato Institute.
Why the harsh rhetoric for George W. Bush from what should
be a sympathetic corner? Because Bush has simultaneously
shrunk the revenue flowing to the federal government through
a string of tax cuts while increasing federal spending like
there was no tomorrow, literally.
Reasoned arguments can be constructed for one action or the
other, but not for both simultaneously. The result is a flood
of red ink in the coming decade so large that it is difficult
to grasp.
Right now the total accumulated federal debt stands at $6.9
trillion. Over the next decade, Bush's policies, if not
adjusted by either raising taxes or cutting spending, or
both, will almost double that debt. Goldman Sachs, a
prominent Wall Street investment firm, warned clients
this week that its latest estimate of $5.5 trillion in
new debt by 2013 may again need to be adjusted upward.
"The U.S. budget is out of control," Goldman Sachs concluded.
Bush has had loads of help from the Republicans who control
Congress. For officials elected on platforms of limited
government and fiscal conservatism, and that includes some
members of the Minnesota delegation, they've done a wretched
job.
Once again in 2004, they'll be back on the stump preaching
fiscal restraint. They need to be challenged on their
behavior over the past two years, behavior that has
conservative pundits and think tanks like Cato and the
Heritage Foundation howling in outrage. As the Cato analysts
said, Republican choices have been "more about politics than
policy." They just don't care about deficits.
That, by the way, is a traditional Southern approach to
budgeting, and the Republican leaders in Congress, plus
the president, all hail from that tradition. But deficits
do matter, and voters need to think about their consequences,
both for the economy and for their children. You can't
borrow $5.5 trillion over 10 years, especially when you
have the sterling bond rating of the U.S. government, and
not crowd out an equivalent amount of private borrowing.
As the debt accumulates, long-term interest rates are bound
to rise, further inflating the cost of federal borrowing,
but also pushing up interest rates on mortgages and capital
investment by business.
Then there are the children and grandchildren who will be
left to pay that debt. Consider the new Medicare bill, for
example. It only passed Congress because Republicans threw
money at HMOs and doctors and hospitals and pharmaceutical
companies until enough arms were twisted and votes were
accumulated. There was no reform, no effort to contain costs.
It is said that the Medicare bill will cost $400 billion over
the next 10 years. But it won't take effect until 2006, so
the $400 billion is actually the cost of the program for only
seven years. In the first full decade, between 2013 and 2023,
the cost goes through the roof, to almost $2 trillion.
Medicare revenues and Medicare costs already are projected
to be out of balance by $5 trillion by the year 2030. This
new bill adds $2 trillion to that shortfall. It all must be
borrowed, and eventually it all must be repaid. That's why
conservative scholars worry that if changes aren't made
Medicare and other entitlements will bankrupt the nation.
Either taxes and premiums must be raised or benefits must
be cut. In the face of that unpalatable choice, adding $2
trillion in new benefits and no new dollars is fiscal suicide.
The Bush administration and congressional leaders will say
that the war on terrorism, homeland security and the recession
have caused this massive budgetary imbalance. They will be
partly right. But discretionary spending not related to those
influences also has escalated dramatically during the Bush
years, even as tax cuts made revenue for those programs shrink.
If you look at discretionary spending growth during President
Bill Clinton's years, he was an absolute tightwad compared
with Bush. To reduce deficits, Clinton grew revenue and
restrained spending. Bush and his friends in Congress have
restrained revenue and grown spending. In the process, they've
put the future of the nation's people severely at risk.
It is impossible for even the United States to grow its way
out of this much red. Deficits matter, and serious choices
must be made soon about both spending and taxing to bring
the budget back to balance.
© Copyright 2003 Star Tribune. All rights reserved.
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