Polls show that Republicans have forged ahead in a number of races across the country, largely on the theme of cutting federal spending. Yet Republican candidates themselves have failed to say precisely what or where they would cut government spending. They have been equally disingenuous when it comes to saying precisely how the nation got into the deficit spending mode that they criticize so much. In reality, their promises have to be vague; they are the chief debt culprits, and they have no actual plan for cuts.
Though both parties have contributed over the years to deficit spending, the bulk of the current debt was built by Republicans — half of it alone by George W. Bush.
Bush took office on the heels of three consecutive years of budget surpluses by the Clinton administration. President Clinton took office facing the enormous run-up in debt from 1980 to 1992 by Republican Presidents Ronald Reagan and George Herbert Walker Bush. Clinton managed to scale back the federal debt to $5.7 trillion by the time he left office, and George W. Bush’s administration doubled that debt, to more than $12 trillion — and with almost $2 trillion more in the pipeline for spending on the Iraq and Afghanistan wars and re-outfitting the military.
Bush II fueled his debt binge by giving exorbitant tax breaks to the ultra-wealthy and by running the two wars on deficit spending, and by failing to pay for the Medicare prescription drug benefit created in 2003, which will cost $1.1 trillion over 10 years. That alone is more than the combined cost of the stimulus plan, the Bush TARP plan and the health care reform act together. (The Abeam health care reform act, by contrast, will save $137 billion over 10 years, according to the non-partisan Congressional Budget Office).
Bush II also failed to rein in the Wall Street casino that finally crashed on his watch, forcing him to create the $700 billion Troubled Assets Relief Program, the TARP bailout for the banks and Wall Street investment firms that Republican candidates now love to pillory.
In fact, the TARP fund, along with other Federal Reserve contingency plans devised under the Obama administration, served America well. Almost all the loans have been repaid, and the program may yet earn a profit on the interest it charged. More importantly, it is widely attributed with preventing the catastrophic financial meltdown of 2008 from tipping into a second Great Depression. Had that occurred on the global scale that was just narrowly averted, the country, now integrally knitted into an unparalleled interdependency on global trade, would still be mired in utter economic misery.
The Obama administration’s effort to pull the economy out of recession has succeeded. But it necessarily added about $1.4 billion in deficit spending. One-third of the $819 billion stimulus funding went to middle class tax cuts and tax credits. A huge chunk of it went to state and local governments, spread over three years, to save or create jobs and to stabilize state and local governments as the recession’s crunch dug in.
Other spending boosted Medicaid and unemployment funds to cushion the circumstances of the vast number of people who lost their jobs in 2008 and 2009 in the depths of the recession. Spending on infrastructure jobs further helped turn the tide against recession.
Republicans haven’t said what spending they would cut to get back to pre-recession 2008 levels, because don’t really a workable plan. Repealing health care reform, in fact, would raise federal spending, and leave insurance companies free again to shaft the ill and deny coverage.
Republicans, moreover, want to add $700 billion in debt over the next 10 years to keep the Bush tax cuts for the wealthiest 2 percent of Americans, whose average annual income is $8 million. With such a program, they will just continue to expand deficit spending, not reduce it. But who’s counting?