June 10, 2009
Some people say that George W. Bush didn't solve any national problems during his eight years in office, but that's not exactly right.
In 2001, Federal Reserve Chairman Alan Greenspan said the Fed might have trouble influencing interest rates if the entire federal debt were paid off--an event that budget projections then forecast. Nailed that one, ex-President Bush can declare.
Indeed, no one will have to worry about the "problem" of a completely repaid federal debt anytime soon, if ever. Before leaving office, Bush had transformed what was projected in 2001 to be a $848 billion surplus for fiscal 2009 into a $1 trillion deficit, nearly a $2 trillion swing from deep black to bright red, according to Congressional Budget Office figures.
That GOP success is a reflection of the Right's massive investment in media over the past several decades and the audacity of Republicans to tick off talking points regardless of reality. A steady propaganda barrage, especially when it's ineffectively countered, can create perceptions that influence the electorate and thus constrain political options.
If Americans think Obama is responsible for the massive deficits, they will be less willing to support his recommendations for addressing a host of pressing problems, from the environment to health care to the economy.
So, it is useful to read Wednesday's New York Times analysis of the CBO budget projections, which revealed that Obama's stimulus plan and other domestic programs account for "only a sliver" of the deficits, about 10 percent of the projected $1.2 trillion deficit for 2009.
The Times analysis by David Leonhardt blamed 37 percent of the $2 trillion swing from surplus to deficit on the business cycle, including the bursting stock-market bubbles and related recessions. The Times traced about 33 percent of the deficit swing to legislation signed by Bush, including his signature tax cuts and his Medicare prescription drug plan.
Though Bush is now out of office, continuation of other of his key initiatives, such as the Wall Street bailout and the Iraq War, contributed significantly to the deficit under Obama, the Times found.
"Mr. 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," the Times reported. "Such policies--together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama--account for 20 percent of the swing."
Obama's stimulus bill, signed in February, accounted for 7 percent of the deficit expansion, and his other early programs, including health care, education and energy, added 3 percent, the Times said. So, the tally would indicate that Bush's policies contributed to 53 percent of the 2009 deficit swing compared to 10 percent from Obama's plans.
Ironically, too, in his efforts to show bipartisan continuity with the Bush administration--especially on the Wall Street financial crisis--Obama has opened himself to GOP attack lines.
Not the First Time