Today, President Obama delivered a budget address during which he introduced his vision for getting the nation’s budget back into balance, while also, importantly, noting the reasons for the nation’s precarious long-term fiscal position. “After Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program — but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts,” Obama said.
Indeed, the nation’s $14 trillion debt is largely a result of “the cost of two wars, a runaway defense budget, the Bush tax cuts for the wealthiest Americans, taxes on the richest Americans being the lowest in a generation, and a recession caused by the lack of regulation of Wall Street.” The Bush administration followed wars with huge regressive tax cuts and an unpaid for prescription drug benefit.
But in his first major address to Congress, President George W. Bush promised that his “responsible” budget would pay off the national debt in ten years:
My budget has funded a responsible increase in our ongoing operations. It has funded our Nation’s important priorities. It has protected Social Security and Medicare. And our surpluses are big enough that there is still money left over.
Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and our grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt repaid more quickly than has ever been repaid by any nation at any time in history.
Of course, the opposite occurred, with debt held by the public increasing from $3.5 trillion to nearly $6 trillion and gross federal debt going from $5.6 trillion to nearly $10 trillion. In fact, conservatives argued in 2001 that the very existence of a budget surplus was a valid reason to enact large, regressive tax cuts. But this is precisely what happens when you have an administration that believes “deficits don’t matter.”