Last Saturday at a townhall meeting at Faneuil Hall in Boston, Senator John Kerry in speaking about the “huge deficit” our country is dealing with, told the crowd that “our friends in Washington are quick to forget where that came from.” It is what former president Bush left us, Kerry noted. And, Kerry is, of course, right.
Some lawmakers, pundits, and others continue to say that President George W. Bush’s policies did not drive the projected federal deficits of the coming decade — that, instead, it was the policies of President Obama and Congress in 2009 and 2010. But, the fact remains: the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1)…
The events and policies that pushed deficits to these high levels in the near term were, for the most part, not of President Obama’s making. If not for the Bush tax cuts, the deficit-financed wars in Iraq and Afghanistan, and the effects of the worst recession since the Great Depression (including the cost of policymakers’ actions to combat it), we would not be facing these huge deficits in the near term. By themselves, in fact, the Bush tax cuts and the wars in Iraq and Afghanistan will account for almost half of the $20 trillion in debt that, under current policies, the nation will owe by 2019. The stimulus law and financial rescues will account for less than 10 percent of the debt at that time.
The CBPP went on to say…
Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs.  By 2019, we estimate that these two policies will account for almost half — nearly $10 trillion — of the $20 trillion in debt that will be owed under current policies. (The Medicare prescription drug benefit enacted in 2003 also will substantially increase deficits and debt, but we are unable to quantify these impacts due to data limitations.) These impacts easily dwarf the stimulus and financial rescues, which will account for less than $2 trillion (less than 10 percent) of the debt at that time. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers.
Without the economic downturn and the fiscal policies of the previous Administration, the budget would be roughly in balance over the next decade. That would have put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.
The fiscal mess we’re in will be changed in part by reversing Bush’s tax cuts for the wealthy. It’s been said over and over again, but until Republicans and their supporters get that, the mess will continue to grow larger and be harder to dig our way out of.