On Monday, The Washington Post reprinted a graph comparing the deficit impact of policies signed into law by President Bush with those signed by President Obama.
The graph claims to show that President Bush’s policies increased the deficit by about $5 trillion over his eight-year term, whereas President Obama’s policies to date have increased the deficit by just $1.4 trillion, even if you extend them out to 2017.
The Post then connects the graph with the debate over raising the debt ceiling by making clear … what, exactly?
The graph itself is badly flawed. Comparing two years of Obama policies with eight years of Bush policies is hardly instructive and many of the numbers are debatable.
More to the point, the need to raise the debt ceiling is made necessary by deficits moving forward, not those incurred years ago. Even if Bush did increase the deficit by $5 trillion, that $5 trillion is already part of our outstanding debt.
What makes this particular debt ceiling debate so sensitive is the level of debt we expect to incur over the next decade and beyond. It’s simply unprecedented, and it raises the legitimate question of whether we will be able to pay it back. That’s why the ratings agencies are threatening action.
As a response, then, it’s not sufficient for President Obama and his allies to sit back and claim, “It’s not our fault!”
The Washington Post points out that many Bush policies will continue into the future. Really? Who has control over that? Being president is not a spectator sport. Somebody needs to remind President Obama that he has the ability to change those policies he doesn’t like. Two and half years into his presidency, this doesn’t appear to have occurred to him.
Waging two separate wars in the Middle East is expensive. Candidate Obama ran against them. President Obama has continued them. At what point do they become his wars?
It made perfect sense that, as a candidate, Obama would criticize the expensive Medicare drug benefit. The obvious hypocrisy (congressional Democrats supported a much more expensive and un-offset drug benefit) notwithstanding, criticizing your predecessor’s policies is what candidates do.
But now that he’s president, doesn’t he have an obligation to propose offsets for the ongoing drug benefit or, failing that, stop making the argument? How many budgets can he propose that are silent on the issue before he takes ownership over the policy and the deficits it generates?
The same goes for the Bush tax cuts that I worked on. Candidate Obama ran against them, but President Obama signed legislation to extend them.
So I have in mind my own graphs. Unlike The Washington Post’s graph, these would speak directly to the debt ceiling debate and our credit rating.
On the left of the first graph is the $4 trillion in deficit reduction the S&P rating agency says we’ll need to avoid having our debt downgraded. On the right is the $2.7 trillion in additional deficits President Obama called for in his most recent budget. If those policies had been enacted, presumably we would need to cut $6.7 trillion to keep our AAA rating.
The second graph would compare pre-crisis to post-crisis spending. In 2007, the annual deficit was $160 billion and total federal spending consumed less than one in five dollars American earned. Both levels are below the 40-year average.
Four years later, the deficit is nearly ten times as large — $1.4 trillion — and federal spending is about one of every four dollars we earn. These levels are unprecedented and they indicate that the deficits we’re running now are largely the result of a short-term explosion in spending.
But even this eye-popping growth in spending conceals the real threat. The real threat is the long-term growth of Medicare, Medicaid, Social Security and, coming soon, the president’s health care reform entitlement. Left unchecked, these programs will soon begin to crowd out all other forms of government spending.
Returning spending to normal levels, controlling entitlements and preserving our credit rating are the central challenges in the debt ceiling debate. To meet them, we will need a president who recognizes our fiscal crisis is before us, not behind us, and is prepared to address it directly.
So Congress is right to force the administration’s hand on the debt ceiling. If we can’t get him to take responsibility now, will we ever?
Brian Reardon is a principal at Venn Strategies and formerly worked for President George W. Bush at the National Economic Council.