President Obama Largely Inherited Today’s Huge Deficits

http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers
By Kathy Ruffing and James R. Horney
December 16, 2009

Some critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years (see Figure 1).

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Some commentators blame recent legislation — the stimulus bill and the financial rescues — for today’s record deficits. But those costs pale next to other policies enacted since 2001 that have swollen the deficit. They are less conspicuous now, because many were enacted years ago, and they have long since been absorbed into CBO’s and other organizations’ budget projections.

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 $7.1 trillion in 2009 through 2019, including the associated debt-service costs. [6] These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts) do not fade away as the economy recovers (see Figure 1).

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 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.

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http://www.washingtonmonthly.com/archives/individual/2009_12/021482.php

This isn't just about pointing fingers for self-satisfaction or partisan vanity. It's important for the public to realize who's responsible, in large part because it's important for the public to weigh policymakers' credibility. If GOP lawmakers embraced policies that are almost entirely responsible for the deficit those same lawmakers are now complaining about, it's a relevant detail.

And on a related note, for those who believe deficit reduction must be a top national priority -- a group that's apparently pretty large -- it's important to recognize which party's proposals are effective in improving, or not, the fiscal landscape.

President Obama will deserve plenty of blame over the course of his presidency, but holding him responsible for getting us into this budgetary mess doesn't make sense.