The only thing more depressing than the fiscal news from the nonpartisan Congressional Budget Office last week is that its report will produce no political earthquake. Let’s look at the facts first before assessing why the reaction is likely to be a yawn.
First, the White House itself admits the deficit this year will reach $427 billion, a new record – or, I should say, another new record, coming on the heels of last year’s record $412 billion. We’ll hit this exciting new mark thanks to a fresh $80 billion in cash for Iraq, which pushes the three-year total for this war toward $300 billion. For those keeping score, that’s more than the inflation-adjusted cost America incurred to fight World War I, and it’s closing in on the cost of the Korean War.
But the CBO’s long-term forecast of $855 billion in deficits over the next decade dramatically understates the red ink poised to flow. That’s because arcane rules require the CBO to assume that (1) no additional money will be spent in Iraq or Afghanistan, that (2) President Bush’s tax cuts will soon expire (though he’s pushing the GOP-controlled Congress to make them permanent), and that (3) the increasing bite of the alternative minimum tax will not be addressed (though both parties vow to act).
Add up these and a few less shocking but still impressive shenanigans and you end up with deficits that top $5 trillion in the next 10 years, at which point the baby boomers’ costly retirement will turn this mere flood of red ink into a true tsunami.
Oh, and one more thing: If Bush proposes to borrow the cash to transition part of Social Security into private accounts, add another $200 billion or so in extra deficits each year!
If you haven’t glazed over or gone into deficit-induced shock, the question is this: How can a path so obviously irresponsible not be broadly understood and inspire public demands to end the madness? Here are my theories:
Media “objectivity.” You know the drill. Bush says, as he did at last week’s press conference, that he’s on track to cut the deficit in half. Democrats say, no, he’s actually on track to bankrupt the country. By stenographically reporting both sides (with any edifying context buried only where wonks will find it), the press makes people think the truth must lie somewhere in the middle.
Democratic fear. As my friend Bob Litan of the Brookings Institution puts it, “we’re living in a 16-20′ country” – that is, the federal government is spending 20 percent of GDP but taking in only 16 percent or so of GDP in taxes. (When Bush took office, before his tax cuts, we took in close to 21 percent.) When you consider that Ronald Reagan and George H.W. Bush’s administrations spent 22 percent of GDP on average, it’s clear that our deficits are a revenue problem, not a spending problem.
Yet Democrats are afraid to utter this truth, which is why Republicans have them in a box. Democrats are probably even too scared to do their duty and insist that Bush pay for the next $80 billion for Iraq by repealing tax cuts for the best-off. After all, they saw how well that worked for the hapless John Kerry, who rightly voted for his plan to pay for our own wars today and against Bush’s plan to slip last year’s $87 billion bill to our kids. (If only he’d explained it that simply, right?)
Republican brazenness. The power of the GOP’s “strategic irresponsibility” is underappreciated. Aping Richard Nixon, who told aides he didn’t mind if the North Vietnamese and the Russians worried about whether he was perhaps a madman, the Bushies don’t mind spooking markets with record debt on the eve of the boomers’ retirement, or baldly putting out plans that don’t come close to adding up. Reagan never paid a price for fiscal recklessness, they reckon. Neither will we.
These forces conspire to prevent the public from grasping that the White House’s fiscal policy is awful and reckless. The Democratic critique is discounted as “political.” And the press won’t push it. Editors and producers believe that if they repeatedly expose Bush’s fiscal hoaxes, it will open them to charges of bias (a fear the White House exploits to muddy the debate).
It may take a new force, a la Ross Perot, to inject much-needed sanity here. We need a massive (and creative) public education campaign by trusted figures who can teach enough of us the facts. They’re not that hard to understand. But for Washington, a little learning here could indeed become a dangerous thing.
Matt Miller is a syndicated columnist and author. Reach him on the Web at www.mattmilleronline.com.
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