Budget deficit to soar
President Bush will leave his successor with a record-high budget deficit of $482 billion, according to an administration estimate released Monday.
White House officials blamed the slowing economy and a $150-billion bipartisan stimulus package for the worsening picture for the 2009 fiscal year, but Democrats cited the president’s tax cuts and fiscal management over his eight years in office.
“The important point to remember is that near-term deficits are both temporary and manageable if, and only if, we keep spending in check, the tax burden low and the economy growing,” said Jim Nussle, director of the Office of Management and Budget, which released the budget report -- the last of Bush’s presidency.
Nussle argued that although it would be the highest deficit in history, it was manageable as a percentage of the country’s economic output -- roughly 3.3% of the gross domestic product. And he said the deficit for fiscal 2008, at $389 billion, would be somewhat less than anticipated.
“The best way to compare a deficit is by your ability in the economy to manage that deficit,” Nussle told reporters in a White House briefing. “We have a plan to address that deficit and bring it down, which I think is a responsible one.”
The budget office’s report also predicted that the country’s gross domestic product would grow by 1.6% in 2008, down from February’s projection of 2.7%. The lower figure was attributed to higher-than-expected prices for oil and other commodities, problems in the credit markets and the continuing difficulties in the housing market.
Democrats on Capitol Hill blamed the revised deficit figures on Bush’s large tax cuts and freewheeling spending.
“If we gave Olympic medals for fiscal irresponsibility, President Bush would take the gold, the silver and the bronze, because he’s got the three highest record deficits ever,” said Sen. Kent Conrad (D-S.D.), chairman of the Senate Budget Committee. “He sets records in every single category: 2009 would be the gold; 2004 the silver; 2008 the bronze.”
Rep. John M. Spratt Jr. (D-S.C.) noted that Bush inherited a budget surplus from his Democratic predecessor, so the blame for the poor fiscal performance rests with him.
“Mr. Bush came to office with the biggest surpluses in history and he will leave office with the biggest deficit in history. That’s the bottom line,” said Spratt, chairman of the House Budget Committee.
Nussle defended the president, noting that he faced unexpected challenges after the Sept. 11 terrorist attacks.
“He had an underfunded military, in fact was running a deficit when it came to our ability to respond to homeland security and international intelligence and making sure that our country was protected,” Nussle said. “So while mathematically there may have been a surplus, there were many underlying deficits that the president had to deal with that became manifest on Sept. 11 and beyond.”
Conrad complained that Bush has long refused to acknowledge the role that his tax cuts have played in the deficit projections. He also accused Bush of using deceptive budget practices, including funding much of the Iraq war off the regular budget.
“This president has burgeoned the debt and the deficit by doing two things: running up spending dramatically and dramatically reducing the revenue in a way that was completely imprudent, that has saddled this country with record deficit and debt,” Conrad said.
But Republicans, who lost their majority in Congress two years ago in part because of voters’ dismay over the country’s burgeoning fiscal problems, warned that a second stimulus package sought by Democrats would only make the problem worse.
“Today’s announcement is a cautionary tale for the next president and Congress that we cannot spend our way out of the economic downturn,” said Sen. Judd Gregg of New Hampshire, the top Republican on the Senate budget panel.
“Skyrocketing energy bills have hit families and businesses hard, and while tax rebate checks have been issued to help address the lag in economic growth, the extra $2,200 families must pay in higher gas and oil bills this year alone have long since absorbed any impact the stimulus payments were meant to have to spur economic growth.”