Setting records
Budget deficit second highest ever Reports from the campaign trail say the voters are outraged over the federal government’s huge running budget deficits. Official figures released last week by the Obama administration show they have much to be outraged about.
The deficit for fiscal year 2010, which ended Sept. 30, came in at $1.3 trillion, the second highest ever, the all-time record being 2009’s $1.4 trillion. And in the short-term it’s not going to get better. The Obama administration forecasts the 2011 deficit will return to the $1.4 trillion level. Private forecasters say it won’t be quite that bad, only $1.2 trillion.
The government ran four straight years of budget surpluses but those were vaporized by Bush tax cuts of 2001 and 2003 that arguably began the run of deficits that got us to where we are today. And the Bush administration never asked Americans to sacrifice to support the wars in Iraq and Afghanistan, whose costs the Center for Defense Information estimated to total just over a trillion dollars at the end of fiscal 2010. Those wars were -and still are – being fought partially on borrowed money.
The voters, egged on by tea party types, are especially angry at President Obama blaming his $814-billion stimulus and the $700-billion bailout of Wall Street and the auto companies, which, although a Bush administration program, they tend to blame on Obama too. (There is growing evidence that the bailout not only worked but also staved off a severe depression; the cruel irony is that George W. Bush won’t get the credit he deserves.)
So the next Congress presumably will consist of newly minted lawmakers all fired up to do something about the deficit, if they’re from the right by cutting government spending.
But meaningful cuts that will have a significant impact on the deficit are available in those high-dollar areas where the government spends most of its money – defense, including veterans’ benefits, Social Security, Medicare and Medicaid. That would take lawmakers with near-suicidal courage and we haven’t seen a lot of that, no matter how tough they talk back home.
Many in Congress are counting on a bipartisan deficit reduction commission for a solution. It is due to report on Dec. 1 but the commission needs the support of 14 of its 18 members to bring a recommendation to a vote in Congress. Among the possible recommendations: ending tax expenditures – the mortgage interest deduction and other incentives – for deficit reductions of $1 trillion a year.
An early test of how serious Congress is about the deficit is whether they kill the tax cuts for families making more than $250,000 a year. That’s a deficit reduction right there of $700 billion over 10 years.
The voters may be outraged over the deficits but they’ll likely be even more outraged by what it takes to reduce them.
Scripps Howard News Service