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Republicans Broke It. Will Democrats Own It?

July 25, 2011

Appearing on Face the Nation Sunday, Illinois Democratic Senator Dick Durbin warned House Speaker John Boehner about his paternity for the economic catastrophe resulting from a Republican failure to increase the U.S. debt ceiling. "If you break it," Durbin told Boehner, "you own it." But as the New York Times was just the latest to document, when it comes to the oceans of red ink hemorrhaging from the U.S. Treasury, Republicans already broke it. And as Senate Minority Mitch McConnell has made abundantly clear, the GOP's goal is make sure President Obama owns it.

Earlier this year, the Washington Post summed up data from the nonpartisan Congressional Budget Office (CBO) to explain the origins of the $14.3 trillion U.S. debt. As the numbers show, history did not, as Republicans pretend, start on January 20, 2009:

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt.

Now, the New York Times has examined the tsunami of debt that began sweeping over the United States when George W. Bush ambled into the White House in 2001. As the chart above shows, Bush's policies along with the recession he presided over not only washed away the projected surpluses he inherited from Bill Clinton, but were also largely responsible for draining the Treasury for his successor Barack Obama:

With President Obama and Republican leaders calling for cutting the budget by trillions over the next 10 years, it is worth asking how we got here -- from healthy surpluses at the end of the Clinton era, and the promise of future surpluses, to nine straight years of deficits, including the $1.3 trillion shortfall in 2010. The answer is largely the Bush-era tax cuts, war spending in Iraq and Afghanistan, and recessions.
Despite what antigovernment conservatives say, non-defense discretionary spending on areas like foreign aid, education and food safety was not a driving factor in creating the deficits. In fact, such spending, accounting for only 15 percent of the budget, has been basically flat as a share of the economy for decades. Cutting it simply will not fill the deficit hole.

As the Times noted, "the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels." But for Republicans, this was a feature of the Bush tax cuts and not a bug. After all, in January 2001 Fed Chairman Alan Greenspan blessed the Bush tax cuts because he was worried that the projected surpluses were too large. For the same reason, a young Congressman Paul Ryan fretted that the windfall for the wealthy was "too small" and "not big enough to fit all the policy we want."

Leave aside for the moment that Ronald Reagan tripled the national debt and increased the debt ceiling 17 times. Forget also George W. Bush nearly doubled the debt or that the Bush tax cuts were the biggest driver of debt over the past decade, and if made permanent, would be continue to be so over the next. Pay no attention to the federal tax burden now at its lowest level in 60 years or income inequality at its highest level in 80 years after a decade of plummeting rates for America's supposed job creators who don't create jobs. Ignore for now that Republican majorities voted seven times to raise the debt ceiling under President Bush and the current GOP leadership team voted a combined 19 times to bump the debt limit $4 trillion during his tenure. Look away from the two unfunded wars in Afghanistan and Iraq, the budget-busting Bush tax cuts of 2001 and 2003 and the Medicare prescription drug program because, after all, John Boehner and Mitch McConnell voted for all of it.

Utah Senator Orrin Hatch was telling the truth when he described Republican fiscal management during the Bush years by acknowledging, "It was standard practice not to pay for things." But House Minority Leader Eric Cantor was lying when he protested two weeks ago:

"What I don't think that the White House understands is how difficult it is for fiscal conservatives to say they're going to vote for a debt ceiling increase."

Not, the record shows, if a Republican is in the White House.
Making the debt picture much worse is the Bush's recession double-whammy of plummeting tax revenue and skyrocketing demand for government services. Nevertheless, Speaker Boehner has insisted for months that a debt reduction package could not include tax increases on the supposed "job creators" he described as:

"The top one percent of wage earners in the United States [who] pay forty percent of the income taxes...The people he's {President Obama] is talking about taxing are the very people that we expect to reinvest in our economy."

If so, the Republicans' so-called "Job Creators" failed to meet those expectations under George W. Bush. After all, the last time the top tax rate was 39.6% during the Clinton administration, the United States enjoyed rising incomes, 23 million new jobs and budget surpluses. Under Bush? Not so much.
On January 9, 2009, the Republican-friendly Wall Street Journal summed it up with an article titled simply, "Bush on Jobs: the Worst Track Record on Record." (The Journal's interactive table quantifies his staggering failure relative to every post-World War II president.) As David Leonhardt of the New York Times aptly concluded last year:

Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.

Just days after the Washington Post documented that George W. Bush presided over the worst eight-year economic performance in the modern American presidency, the New York Times on January 24 featured an analysis ("Economic Setbacks That Define the Bush Years") comparing presidential performance going back to Eisenhower. As the Times showed, George W. Bush, the first MBA president, was a historic failure when it came to expanding GDP, producing jobs and fueling stock market growth. The dismal 3 million jobs created under President Bush didn't merely pale in comparison to the 23 million produced during Bill Clinton's tenure. In September 2009, the Congressional Joint Economic Committee charted Bush's job creation disaster, the worst since Hoover.
But as Mitch McConnell made clear earlier this month, his goal is to convince Americans that the Bush recession was all Barack Obama's fault. That, he explained, was why Republicans had to reach a debt ceiling deal and avoid a disastrous default by the United States:

"I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy. ... If we go into default, he will say that Republicans are making the economy worse and try to convince the public -- maybe with some merit, if people stop getting their Social Security checks and military families start getting letters saying servicepeople overseas don't get paid. It's an argument he could have a good chance of winning, and all of the sudden we have co-ownership of a bad economy," he said. "That is very bad positioning going into an election."

Time will tell if McConnell succeeds. Polls show that Americans by wide margins still blame George W. Bush and not Barack Obama for the dismal economy. Other surveys back up Dick Durbin's suggestion that Republicans will own the default if they succeed in blocking an increase in the debt ceiling. But when they entered the voting booth last November, Americans gave the GOP an overwhelming victory. Republicans are counting on the electorate's short memories again in 2012.
As Dick Cheney famously put it after the passage of the Bush tax cuts, "Reagan proved deficits don't matter."
Unless, of course, a Democrat is President.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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