The new estimates by the federal budget office that the budget deficit this year will reach $400 billion and next year will reach $500 billion should be a major source of embarrassment to the Republicans in Washington -- assuming they have any fiscal conscience left to embarrass.
President Bush and Congress have simply refused to make fiscal choices -- they have cut taxes, increased the military budget, the foreign aid budget and increased social spending all at the same time. Now we are swimming in red ink.
Next month they are set to enact a $460 billion Medicare bill to provide drug benefits to the wealthiest age group in America. This will be the biggest new entitlement program in 25 years.
The tide of red ink will rise even higher, with economists at the National Center for Policy Analysis suggesting that the debt from this program could exceed $3 trillion over the next 50 years.
Should Be Ashamed
The new Congressional Budget Office numbers gloomily inform us that in Bush's four years in office, the budget will be up by $500 billion. That's a bigger increase than the amount the budget grew in Bill Clinton's eight years in office. It's hard to imagine that the budget would grow that fast even if Carol Moseley Braun had been elected to the White House.
There's also no hint that the GOP has been chastened by the enormous deficits it is responsible for or the meteoric rise in spending.
Example: Rep. Mark Kennedy of Minnesota is now fighting a lonely battle to try to trim the cost of the upcoming highway bill that is slated to have a cost of about 50% more than the last bloated highway bill.
I have said it before and will say it again: This is fiscal child abuse. Passing on costs to future generations for today's wasteful government spending is an assault on the financial well-being of our children. Conservatives can no longer apologize for the Republicans' miserable financial mismanagement. They should be infuriated by it.
I believe that Bush has been a star when it comes to enacting pro-growth tax changes. The tax code has taken a pro-investment, pro-worker direction through cuts in the death tax, the capital gains tax, the dividend tax and the income tax rates.
Bravo. Bush is absolutely right that the first step to getting the deficit under control is to get back on high economic growth trajectory. And tax rate cuts will certainly help achieve that faster growth.
Don't believe a word of the Democratic whine from presidential wannabes like Dick Gephardt and Howard Dean that if only we hadn't cut taxes, the budget would be under control. That's a fantasy.
Without the tax cuts, the budget would still be in huge deficit and the budget would have probably grown even more recklessly.
A fascinating new study was just released by the House Republican Study Committee under the able leadership of Rep. Sue Myrick of North Carolina. The RSC shows that if Congress had simply lived under the spending limits set forth in the 1997 budget deal agreed to by Clinton and the Republicans in Congress, the budget would be balanced today -- even with Bush's tax cuts.
Meanwhile, my own budget analysis shows that every Congress since 1994 has accelerated expenditures at a faster pace. Conclusion: It's the spending, stupid! (See chart.)
There's a spirited debate in Washington about how the budget deficit impacts our economy. Some say deficits cause inflation and higher interest rates. Maybe so, but there's little evidence of that effect.
Some say interest payments on debt crowd out other spending -- which may be true, but if it is that's a good thing, because it constrains the congressional spending appetite.
My belief is that budget deficits are primarily harmful because they make it too easy for politicians to spend money now and then pass the bill to taxpayers later. And many of those future taxpayers are too young to vote now, so we have an unrivaled case of taxation without representation.
No Free Lunch
The ultimate blame for the enormous mushrooming of deficit spending ultimately rests with the White House. The buck simply doesn't stop at this president's desk. Bush wants more guns and more butter, and wants to pretend that no one will ever have to pay for the profligacy.
But Milton Friedman taught us years ago that "there ain't no such thing as a free lunch." Government spending comes out of somebody's hide -- eventually.
What's reprehensible is that the Republicans now say in unison: Let the 2-year-olds pay for it. And someday they will. This is the coward's solution. A balanced budget requirement with an expenditure limitation is probably necessary because the biggest deficit in Washington these days is the deficit of courage.