Editorial | Deconstruction
By TERESA TRITCH
Published: July 23, 2011
With President Obama and Republican leaders calling
for cutting the budget by trillions over the next 10 years, it is worth
asking how we got here — from healthy surpluses at the end of the
Clinton era, and the promise of future surpluses, to nine straight years
of deficits, including the $1.3 trillion shortfall in 2010. The answer
is largely the Bush-era tax cuts, war spending in Iraq and Afghanistan,
and recessions.
Despite what antigovernment conservatives say, non-
defense
discretionary spending on areas like foreign aid, education and food
safety was not a driving factor in creating the deficits. In
fact, such spending, accounting for only 15 percent of the budget, has
been basically flat as a share of the economy for decades. Cutting it simply will not fill the deficit hole.
The first graph shows the difference between budget projections and budget reality. In
2001, President George W. Bush inherited a surplus, with projections by
the Congressional Budget Office for ever-increasing surpluses, assuming
continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In
January 2009, just before President Obama took office, the budget
office projected a $1.2 trillion deficit for 2009 and deficits in
subsequent years, based on continuing Mr. Bush’s policies and the
effects of recession. Mr. Obama’s policies in
2009 and 2010, including the stimulus package, added to the deficits in
those years but are largely temporary. READ MORE
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