The Democratic Caucus at Harvard Kennedy School
by Mary Smith on November 11, 2009 in Dems v. Reps, Opinion
Despite popular sentiment, it has been Democratic presidents who have historically made the difficult decisions to balance the budget and help reduce the national debt. Republican presidents, on the other hand, claim fiscal responsibility even as they spend the United States into a massive hole. Now, President Obama is coming under attack for fiscal irresponsibility from Republicans, when he is taking the necessary steps that will help save the American economy.
Looking at history, Republicans have consistently been enormous debtors. Even the champion of small government, President Reagan, spent without limit. In just eight years, Reagan was able to triple the national debt. He never once submitted a balanced budget to Congress during his presidency. He thought cutting taxes meant small government, but if you do not have the political will to follow that up with cuts in spending then you are fooling yourself and the American people. Reagan ran enormous budget deficits that drove the U.S. to its highest ever levels of debt.
After the massive spending years of Reagan and Bush 41, we finally got Bill Clinton. Republican love to accuse Democrats of being the teenager running around with America’s credit card, but by the end of the Clinton years, the government had balanced its budget and was headed towards paying down the national debt.
In the eight years after the Clinton administration, George W. Bush drove the national debt from just over $5 trillion to $10 trillion. In his two terms, Bush amassed more debt than any president did from George Washington through to his father’s administration, combined. Pulling a page from the Reagan playbook, Bush promised small government and his first step was to cut taxes. Unfortunately, he followed up, not with spending cuts, but with massive unfunded programs such as Medicare Part D.
The future of the United States may be bleak indeed because of our crushing debt load. We need to address the debt, but cannot do so at the expense of our economic recovery. We need to distinguish deficits for economic stimulus reasons, such as those proposed by President Obama, and deficits for irresponsible reasons, such as those presented by President Bush. The recovery bill set forth by President Obama is one of the only reasons there are some bright signs in our economic future. According to Peter Orszag, the director of the Office of Management and Budget, the recovery bill is one of the main reasons that we saw GDP growth this quarter. The current budget deficit and the mounting debt are a major concern for President Obama and the American people, but we cannot stomp on these green shoots of economic recovery by tightening up the federal budget too quickly. We must withstand these short-term deficits in order to address the longer-term debt problem after we have come out of this deep recession.
Putting it all into perspective, according to OMB estimates, the U.S. government will add another $9 trillion to its debt over the next decade. Of that $9 trillion, more than half comes from President Bush’s policies – the 2001 and 2003 tax cuts as well as the unfunded Medicare Part D. Only 10 percent comes from the Obama recovery bill. Once the United States comes out of this recession, we will see the Democrats, not the Republicans, making the tough but necessary choices to help pay off the debt.
President Obama faces a political storm, as the deficit hawks – silent for years now – will come down on the president for his economic recovery plans that include deficit spending. As politically difficult as this will be, I know that President Obama will withstand the political pressure and do what is best for the American economy and the future of our country. He will continue his short-term policies encouraging stabilization and economic growth and get serious about reducing the national debt once the economy is back up and running.
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