The Fiscal Legacy of George W. Bush

[Direckshun]

Pretty messy.

http://economix.blogs.nytimes.com/20...george-w-bush/

The Fiscal Legacy of George W. Bush
By BRUCE BARTLETT
June 12, 2012, 6:00 am

Bruce Bartlett 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.

In 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 administration.

The second major contributor to budget surpluses 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. His Feb. 28, 2001, budget message reiterated this point and asserted that future surpluses were likely to be even larger than projected due principally to anticipated strong revenue growth.

This was the primary justification for a big tax cut. Subsequently, as it became clear that the economy was slowing – a recession began in March 2001 – that became a further justification.

The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.

According to the C.B.O., by the end of the Bush administration, legislated tax cuts reduced revenues and increased the national debt by $1.6 trillion. Slower-than-expected growth further reduced revenues by $1.4 trillion.

However, the Bush tax cuts continued through 2010, well into the Obama administration. These reduced revenues by another $369 billion, adding that much to the debt. Legislated tax cuts enacted by President Obama and Democrats in Congress reduced revenues by an additional $407 billion in 2009 and 2010. Slower growth reduced revenues by a further $1.3 trillion. Contrary to Republican assertions, there were no additional revenues from legislated tax increases.

In late 2010, Mr. Obama agreed to extend all the Bush tax cuts for another two years. In 2011, this reduced revenues by $105 billion.

On the spending side, legislated increases during the Bush administration added $2.4 trillion to deficits and the debt through 2008. This includes $121 billion for Medicare Part D, a new entitlement program enacted by Republicans in 2003.

Economic factors added almost nothing to increased spending – just $27 billion in total. This is mainly because interest rates were much lower than C.B.O. had anticipated, leading to lower spending for interest on the debt.

After 2008, it becomes harder to separate spending that was initiated under Mr. Bush from that under Mr. Obama. We do know that spending for Part D has risen rapidly – Republicans phased in the program to disguise its budgetary cost – adding $150 billion to the debt during 2009-11.

According to a recent report from the Center for Strategic and International Studies, the unfunded wars in Iraq and Afghanistan increased the debt by $795 billion through the end of fiscal 2008. The continuation of these wars by Mr. Obama added another $488 billion through the end of 2011.

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 would have us believe that somehow we could have avoided the recession and balanced the budget since 2009 if only they had been in charge. This would be a neat trick considering that the recession began in December 2007, according to the National Bureau of Economic Research.

They would also have us believe that all of the increase in debt resulted solely from higher spending, nothing from lower revenues caused by tax cuts. And they continually imply that one of the least popular spending increases of recent years, the Troubled Asset Relief Program, was an Obama administration program, when in fact it was a Bush administration initiative proposed by the Treasury Department that was signed into law by Mr. Bush on Oct. 3, 2008.

Lastly, 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 these facts.

[mikey23545]

[FishingRod]

Bush was not a good POTUS. Obamma has doubled down on all of the Bush Policies.
Obama = W-2

[Garcia Bronco]

For the last time people, congress spends the ****ing money. Not the President. If you want to point a finger at something for our financial debt...look at the people that run the books and decide where the money is spent. CONGRESS. There are two committees that decide how money is spent. One in the House and one in the Senate. GFG.

[Iz Zat Chew]

Originally Posted by Garcia Bronco

For the last time people, congress spends the ****ing money. Not the President. If you want to point a finger at something for our financial debt...look at the people that run the books and decide where the money is spent. CONGRESS. There are two committees that decide how money is spent. One in the House and one in the Senate. GFG.

Better check your facts.

[Garcia Bronco]

Originally Posted by Iz Zat Chew

Better check your facts.

It's a fact.

[Garcia Bronco]

You can check facts here for the House

http://waysandmeans.house.gov/

[Garcia Bronco]

Here's the one in the Senate

http://www.appropriations.senate.gov/

[Garcia Bronco]

Seriously...it's like some of you have never taken a Civics class in your entire academic career.

[Iz Zat Chew]

Originally Posted by Garcia Bronco

It's a fact.

What you are missing, purposely I'd bet, is that the president pressures programs he wants funded along with all of the other stuff that goes through.

If you would check, the Senate has not provided a budget for years, it's mandated that a budget be presented annually, they've not done so for a long time.

The president has the veto option on any spending. If spending is such a hot topic why is it that we see very few veto's on spending legislation?

Technically you are correct, but the president influences what is produced from both the house and the senate.

[FishingRod]

Originally Posted by Garcia Bronco

For the last time people, congress spends the ****ing money. Not the President. If you want to point a finger at something for our financial debt...look at the people that run the books and decide where the money is spent. CONGRESS. There are two committees that decide how money is spent. One in the House and one in the Senate. GFG.

Quite true but, he is required to submit a budget to congress. Then they chop it up and change it. Then President can, if so inclined, veto it which would then require a 2/3 majority to make it Veto proof. So the President could have a great deal of influence on spending if he were to have the backbone to do so.

[alpha_omega]

Way too long to post...but since we are referring to this article by Bruce Bartlett, i thought we might want to check this one out also, it is off topic, but..anyway...here is the link...

HOW EXCESSIVE GOVERNMENT KILLED ANCIENT ROME
http://www.cato.org/pubs/journal/cjv14n2-7.html

[Garcia Bronco]

Originally Posted by Iz Zat Chew

What you are missing, purposely I'd bet, is that the president pressures programs he wants funded along with all of the other stuff that goes through.

If you would check, the Senate has not provided a budget for years, it's mandated that a budget be presented annually, they've not done so for a long time.

The president has the veto option on any spending. If spending is such a hot topic why is it that we see very few veto's on spending legislation?

Technically you are correct, but the president influences what is produced from both the house and the senate.

Doesn't matter. I can recommend things to Congress as well, but not a dime gets spent until these two committees give me the money.

You're making my point. Again, congress is the one that spends the money. The fact that they refuse to pass a budget shows how broke we really are because of Congress and it's inability to be fiscally responsibile. Congress is our fiscal problem.

The President can either pass a bill or veto it...within 7 days of it reaching his desk. He can't decide to veto parts of legislation (except for a brief period from 1996 to 1998). And since Congress lumps different bills into on bill regarding just about anything...the President is in a politcally and fiscally unwinnable sitation balancing good ideas with bad ones.

While you are correct that the President is in the best position to get his agenda passed. Congress can tell him to ****-off...anytime they like and override his veto.

[Iz Zat Chew]

Originally Posted by Garcia Bronco

While you are correct that the President is in the best position to get his agenda passed. Congress can tell him to ****-off...anytime they like and override his veto.

The problem is that the president pressures congress to pass bills in such a way that they can't tell him to **** off. It would be political suicide.

They have the purse strings, but he is building the empire he needs to accomplish the crazy shit he wants done.

The real point is that we cannot keep spending what we do not have.

[Brainiac]

There is a little bit of truth to the article. Bush was not a good President in many ways. It can be argued that the Bush tax cuts cost the government a lot of revenue (because of a miscalculation regarding where we were on the Laffer Curve), and it can be argued that the war in Iraq was not worth the hundreds of billions of dollars that it cost.

However, the article also jumps to some pretty wild conclusions, and as a result it's little more than a shill for Obama and his hopes to be re-elected. This article tries to blame Bush for everything that is wrong with the economy after three years of an Obama administration, the first two of which were with filibuster-proof majorities in Congress. The article blames the Bush tax cuts for the drops in revenue in the early 2000s, but completely ignores the dot-com bust of 2000, the stock market crash of 2000–2002 that caused the loss of $5 trillion in the market value of companies, and some very questionable business decisions at the time (such as the merger of AOL and Time Warner). Oh, by the way, there was also this little incident on 9/11/2001 that turned out to be both a drag on the economy and the reason that we wound up spending additional hundreds of billions of tax dollars for military spending.

It would be nice to think that if we had just left tax policy alone after the Clinton era that everything would be just peachy keen these days and that we'd be running surpluses instead of deficits. But that simply isn't the case. Obamacare all by itself will add trillions of dollars to the deficit when you factor in the direct costs of implementing it (there's one trillion right there) plus the negative impact it has on the economy. And if Obama somehow manages to get re-elected and is able to implement his stated #1 objective for his second term (massive changes to "prevent" global warming), then God help the economy.

This article would have you believe that Obama is running against Bush, and that's deliberate. It's much better for Obama to run against Bush than to run against his own dismal record.