NY Times On Coming Deficits: We Blame Bush

What a complete crock ... and an incredibly revealing quote regarding the Health Care debate. That first. "Take money from ...."? Move along folks, no heavy hand to see here. Imagine the quality of Docs and breakthrough drug development we'd be seeing if the government takes money from those areas.

First, even if a health overhaul does pass, it may not include the tough measures needed to bring down spending. Ultimately, the only way to do so is to take money from doctors, drug makers and insurers, and it isn’t clear whether Mr. Obama and Congress have the stomach for that fight. So far, they have focused on ideas like preventive care that would do little to cut costs.

But their treatment of the deficit angle is the real disgrace. Obama's only culpability is continuing Bush's war efforts and leaving his tax cuts alone for now. And the long-term projections are laughable.

The first is that President Obama’s agenda, ambitious as it may be, is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying. The second is that Mr. Obama does not have a realistic plan for eliminating the deficit, despite what his advisers have suggested.

The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012.

Today, the government is expected to run a $1.2 trillion annual deficit in those years. You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

Yes, see, Cap and Trade won't cost the government money, so how can it be Obama's fault? They totally ignore the impact of Obama's policies on the private sector and how that will impact revenue and increase some entitlement spending in outlying years. Besides, what's the big deal, Obama can just raise taxes for that. We know they don't impact the economy and ultimately revenue ... if you add like the NY Times.

And even with all the cover, Obama still fails as his outrageous and intrusive plans don't achieve his stated goals. But forget all that, just blame Bush. And this is all cover for tax increases. Get ready, because here they come. It's a new Democrat day - bigger government, more Fed control and higher taxes. Really, what is so new about all that?

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don’t cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Comments

[Chris]

...and it isn’t clear whether Mr. Obama and Congress have the stomach for that fight.

It should be clear to anyone that this is a fight Obama can't wait to take on. WTF? Taking money from the "greedy" is his life's work.

[eaglewingz08]

This NYSlimes article is a crock. The cap and trade plan going through democrap Congress will cost the government money because the corruptocraps legislated that many Friends of Pelousy & Co., don't have to bid or pay for their licenses to pollute which otherwise would have been sold by the government, for what purpose(?) TO RAISE REVENUE. Thus, by reducing the revenue obtainable by the government from the illconceived illadvised halfbaked anticapitalist, antiUSA cap and trade bill, Obama has in fact reduced government's potential revenues and added another multibillion dollar hole to its fiscal affairs.

I wonder when Obama's scalpel is coming out with his cuts in spending on non military discretionary items? Maybe for FY 2016? It was also reported that Obama changed those danged Bush budget rules so that all this health care spending deficits and energy deficits and TARP deficits and Porkulus deficits are off budget with respect to any PAYGO provisions for additional spending. Gee, if you remove eleven trillion dollars from the democraps' spendulus why would you even claim to have a PAYGO system, except for cynical and arrogant political ploys?

[Anon]

I've found that over the last several years it is the most prominent, most hyped 'investigative' and/or 'overview' 'research' pieces by the Times that are the most full of outright errors and/or misleading statements.

Sad.

[Nishner]

The financial mess we're in is largely a result of policies put in place during the Bush Administration as the article clearly explains. Bush inherited a budget surplus and left office running the largest deficits in history. He also left behind two wars, and gave us a prescription drug benefit program that bars negotiating for lower prices.

[Anon]

No, the financial mess we are in is largely the result of trends in the capital markets that have been ongoing since the Clinton Administration, primarily the massive rise in so called 'sophisticated' financial instruments and the uber leveraging that went with them and unwillingness on the part of Clinton and Bush to regulate said instruments.

Obama's deficits are already many times larger than those of Bush II and his rosy financial mumbo jumbo to camoflauge this is no better than that of the Bushies.

The prescription drug benefit is a crap program but that is not the real source of problems with health care expense.

[Christopher Taylor]

Actually deficits under President Bush dropped every year since 2003, until the housing and financial crisis was triggered. That last year was a big deficit... one that is eclipsed by the one President Obama's spending is giving us. And he wants to spend EVEN MORE.

[Nishner]

Obama's been in office for five months - the mess he has was inherited - he didn't create it. You can certainly argue with his programs / plans, but our mess isn't of his making.

I'd agree that not regulating the capital markets has much to do with the collapse of the financial markets.

Bush's deficits went up through 2004, down some in 05, 06 and 07, then spiraled up again in '08 as the markets crashed and Federal bailouts kicked in.

[Wally Sandaber]

I am completely baffled by this blog item and all the tea party protests about deficits. While 99% of the right wing blogs and TV talking heads decry the current administrations spending, about 98% of these same commenters said NOTHING when Bush was racking up enormous multi-year deficits. That huge deficit spending on war and non negotiable prescription drugs was made when the economy was actually pretty stable. 99% of economists agree that you reduce deficits when the economy is good and then per the lessons of the depression, when confronted with a serious economic downturn, you use stimulus/deficit spending to avoid getting into a depression. This is pretty basic stuff. Now, commenters here may go with Hot Air, Riehl, and Rush over thousands of economists, including Nobel Prize winning economists, but I will stick with the economists.

[Rob Crawford]

"Wally", go peddle your lies somewhere else. We've heard them all before and know you're getting them spoon fed to you by your fascist left masters.

[Bob]

"No, the financial mess we are in is largely the result of trends in the capital markets that have been ongoing since the Clinton Administration, primarily the massive rise in so called 'sophisticated' financial instruments and the uber leveraging that went with them and unwillingness on the part of Clinton and Bush to regulate said instruments."

But these are two completely different "messes." The article says nothing about what CAUSED the current economic meltdown. It's only focusing on administration fiscal policies and their effect on raising and spending funds. The current economic meltdown, and the earlier recession after 2001, are captured in the analysis only insofar as they reduce tax revenues because incomes are down, and increase spending for social support programs that are up due to unemployment increases and so forth. As the article says,

"The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years."

The remaining three broad areas that contribute to the deficit are (2) Bush's policies and programs -- 33%, (3) Obama's continuation of some of Bush's programs like the Iraq war -- 20%, and (4) Obama's own policies and programs -- 10%.

So while the recent economic downturns get the largest share of the blame (WHATEVER you can argue caused it), Obama's deficit contributions really pale in comparison to Bush's. It's really a pretty easy conclusion to make once you see these numbers. And the numbers themselves are simply the annual budget deficit numbers from the Congressional Budget Office, so it's not like they're particularly controversial.

But conservatives like Riehl, rather than providing an alternative numerical analysis, think they can get away with sweeping assertions that have no basis in anything other than fact-free wingnut theology, such as, "They totally ignore the impact of Obama's policies on the private sector and how that will impact revenue and increase some entitlement spending in outlying years." Yeah, it reminds me of that meme from a couple of months ago about how Obama's election was supposedly causing the stock market to tank . . . just before it started going up sharply. It must be so easy to be a right winger and never have to provide any facts or numbers to back up your claims.

[mark l.]

"Obama's been in office for five months - the mess he has was inherited - he didn't create it."

2009 budget 3.1 trillion.
2010 budget 3.6 trillion.

so, if the bush budget was so bad, you'd think that obama would follow thru on his debate offering of a "net spending cut."

what part of the 09 budget was going to be cut out to allow for obama's spending of 2010?
it also seems that there is a 500 billion dollar increase in spending.

it is george bush's fault that there can be no program cuts and that there needs to be a 500 billion dollar increase to the deficit?

can't wait to see the campaign spots for 2010. The dems will need a 30 minute infomercial just to get back to parity.

[Anon]

I don't see how it is possible that Obama's spending is going to account for only 10% of future deficits if he has ALREADY undertaken more deficit spending since he took office than Bush did in his 8 years.

There must be some smoke and mirrors accounting going on that doesn't include what he's doing with TARPm which although allocated under Bush is being continued with few changes [sadly] under Obama, somehow doesn't include the stimulus money and only includes Obama's highly unrealistic health care numbers.

[anon]

Here is what the Times says:

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

My old math skills then put that at 20% of Obama continuing Bush policies plus 7% for the stimulus, plus 3% for his other programs, which makes Obama responsible for 30% of projected deficits and that is again, not counting health care.

Or, I could put it another way and say it took Bush 8 years to get to approximately a third of the deficit and it has taken Obama only FIVE MONTHS to account for 10%?!?!? That doesn't really bode well for his future ability to go through the Federal budget line by line and make cuts.

And that is taking the Times numbers at face value, which I would put about a 90% chance that they have done some selective editing in order to come up with a conclusion that is most favorable to Obama.

[terry penna.]

the times are in bed with obimbo he should be impeach now.

[mark l.]

"The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012."

as bill clinton was leaving office...

gdp % change from previous quarter:
1q00 1%
2q00 6.4%
3q00 -.5%
4q00 2.1%
clinton leaves...
1q01 -.5%
1q02 1.2%
1q03 -1.4%
1q04- 1.6%

so let me get this straight. the poor numbers from bush's first year are his fault, not clinton's.
eight years later, I'm being told that the incumbent is NOT responsible for the first year(in office) numbers.

just asking...
at what point is obama responsible for gdp?

if we are giving free passes to obama, you are also excusing bush for what clinton left him.

[mark l.]

along the lines of blaming the first year numbers on gdp on previous administration:

93 1q .5%
93 2q 2.0%
93 3q 2.5%
93 4q 5.5%

clinton's budget didn't even go into effect until 94. So much for clinton leading us out of recession, so long as we are 'blaming' the previous admin for our financial plight.

[Nishner]

Had Obama inherited an economy in even remotely the same shape that Bush did, I'd agree with you. But he didn't. He got the worst financial crisis since the Great Depression from a guy that claimed to be a Fiscal Conservative.

For the first quarter of 2009: "GDP, the value of all goods and services produced within the U.S., declined at a worse-than-expected annual rate of 6.1 percent after having fallen at a 6.3 percent rate in the final three months of last year. It marked the worst two-quarter performance for the GDP in a half century."

When Bush took office, the talk was about budget surpluses as far as the eye could see. When Obama came in, the talk was about whether or not we'd slip into a world-wide depression.

[Bob]

"My old math skills then put that at 20% of Obama continuing Bush policies plus 7% for the stimulus, plus 3% for his other programs, which makes Obama responsible for 30% of projected deficits and that is again, not counting health care."

But the "continuing policies" include things like the Iraq war and the Medicare prescription drug benefit, neither of which Obama enacted and neither of which he likely approves of, but also neither of which he's free to simply terminate on short notice. I think it's fair to continue to give Bush "credit" for those.

[Bob]

Another thing that should be pointed out is that during most of Bush's time in office, there was no looming economic catastrophe that required any massive outlays of government funding to deal with. Most of Bush's deficits were incurred during fair-to-middling economic times, which makes the excess of his spending-plus-tax-cuts even more striking. Obama is having to tackle a once-in-a-lifetime economic catastrophe, which accounts for much of his spending so far, and even at that, he's STILL coming in as more frugal than Bush.

[anon]

Yes, he is stuck with the Iraq war funding and that is not his fault and there is nothing that can be done there, that is ALL on Bush.

However, the prescription drug benefit, TARP and just about anything else is something that he does have maneuvering ability on and he can choose to continue, to endorse or not, to put forth new budget numbers or proposals. If he doesn't, then they become part of his legacy and he becomes responsible for them. He is, in my view, now 100% responsible for TARP, whether it succeeds or fails because he has wholeheartedly endorsed the plan which was put forth by Paulsen with only a few changes here and there [what makes anyone in the Obama Administration or otherwise think that the very first time a Bush Administration official would come up with the right solution the first time would be in the face of an unprecedented meltdown of the entire financial sector is beyond me], but he's endorsed it, he's running it and so he owns it.

I just don't trust the NYTimes anymore, they have to be fact checked just like every other media outlet. They've made too many serious errors in judgement, they are not your father's New York Times by a long shot.

[mark l.]

"He got the worst financial crisis since the Great Depression from a guy that claimed to be a Fiscal Conservative."

hmmm...

my understanding of the structure of govt may be limited, but it isn't as if the senate and house are in a vacuum.

the last two years of bush?
he has a democratic house and senate that share some responsiblity. I missed their warning bells. remember something about "paygo", but maybe that was pelosi's new kitten.

bush's sins?
he signed the budgets provided to him by the house and senate. he is at fault, but definitely not alone.

I figure by the time the midterm rolls around, we'll have had four years to evaluate the effectiveness of the democratic congress.

what success do you find in their powers thus far? i wouldn't exactly use "prescience" in describing their actions.

[mark l.]

"When Bush took office, the talk was about budget surpluses as far as the eye could see."

talk? absolutely.

reality?
"The NBER's Business Cycle Dating Committee has determined that a peak in business activity occurred in the U.S. economy in March 2001. A peak marks the end of an expansion and the beginning of a recession."

http://en.wikipedia.org/wiki/Early_2000s_recession

the budget projections that provided for a surplus were made based upon the peak growth during the dotcom boom.

[mark l.]

interesting read?

http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

phyiscal page: 59.

A brief summary of finished budgets and projected budgets...

you can see where the outlays are broken down.

[Bob]

"The NBER's Business Cycle Dating Committee has determined that a peak in business activity occurred in the U.S. economy in March 2001. A peak marks the end of an expansion and the beginning of a recession."

That's why the Times story doesn't hold Bush responsible for what they term the "business cycle" effect, which they assign 37% of the deficit. But Bush's combined share of the remaining deficit is greater than what's due to the business cycle itself, as the article says. And most importantly, when it comes to Obama's histrionic critics, is that Obama's own share is a fraction of Bush's no matter how you slice it.

And it has to be asked again, where were all of those deficit critics in previous years when they had a chance to show that their objections were based on principles rather than politics? Even while dealing with much larger deficits, most current critics of Obama's programs were totally silent. It really puts things in perspective.

[mark l.]

i'm a conservative bob, not a republican.
the gop is 'still' an apostate to the church of fiscal conservatism. they were once there though...

aside from a brief interlude with clinton(forced by opposition house and senate), the dems have never sat in the pews of this 'church'.

pretending that the dems are believers is rich.

moderates are going to fall off the bandwagon soon...

[anon]

I've always been against deficit spending, and please, George W. Bush was no conservative, he's as radical as they come, he just happens to be a right wing radical, but he is not and never was a conservative.

The GOP did themselves a huge disservice by letting Bush run wild on all fronts, and now they are paying for it and I am paying for it and eventually the country as a whole will pay for it.

Whether 'conservatives' have really learned their lesson here remains to be seen. I doubt it.

What I have come to believe is that part of the reason this country is doomed is that BOTH SIDES conveniently ignore facts and reality when it doesn't fit their agenda, whatever that may be, war, affirmative action, evolution, deficit spending, safe sex...you name it, everyone on both sides is willing to overlook the cold hard truth when it doesn't conform to ideology.

Any society that bases its policy on fantasy and not reality cannot survive, because reality will eventually rear its head.

We got one dose of reality when the false economy of worthless securities and churning of stocks came crashing down, with more to come.

However, I don't see Obama coming close to rising to this challenge, I have about as much faither in Geithner as I had in Paulsen and Rubin, that would be tantamount to 'zero'. They're products of Wall Street and cannot see beyond Wall Street's now discredited priorities and belief.s

[mark l.]

I have a theory on the midterms...

no minority candidate on the ballot. no youth vote.

just blue and red diehards, 30% independents, and/or old people.
seniors love dems when they talk about social security for them, but blanche at the thought of 'wasting' money on anything else. Seniors? they have healthcare already. All they want is a fatter social security check, and even obama doesn't have the guts to buy em off.

the senate is too far gone for 2010, but the dems in the house are going to get gobsmacked.
can't wait to break out that old line- "It's the economy stupid."

obama did predict 4% growth, but then simultaneously offered his projections based on a peak of 8% unemployment. High unemployment/stagflation...they are all going to be fixed in nov 2010? The only way fiscal conservatism flourishes again? spend democrats, spend.

[Bob]

Hey anon and mark, what's your take on the part of the Times story that says that the only way Obama can bring down healthcare costs in the long run is:

". . . to take money from doctors, drug makers and insurers, and it isn’t clear whether Mr. Obama and Congress have the stomach for that fight."

It IS kind of a zero-sum game, isn't it? They can say that they hope to contain overall healthcare costs through managed care, i.e. a dollar of prevention is worth $10 of cure, but is that realistic? I kind of doubt it. So how else can you save without cutting into the profits/income of doctors, insurers and drug makers? I think that the most difficult part of setting up a cost-efficient system -- once you get past the SOCIALIZED MEDICINE knee-jerk fears of much of the citizenry -- is having to take on these extremely powerful interests that don't want to give up any of their action.

[mark l.]

bring down healthcare costs?
don't make govt healthcare free. yes, pay for an annual physical with blood work, but every other visit must bear a cost. allowances, refunds, etc can be adjusted for by income.

i understand obama's initiative to computerize medical records to reduce redundant tests. good intentions, but it won't work. If they really want to cut into tests, slow down the number of people seeking free care in the first place. No one is refused, but just as taxation slows business, making the consumers pay a little more for healthcare would shrink the number of visits.

consider the people who aren't insured. I think that many of them would be actually willing to pay, as in voluntary, a nominal fee(30 bucks a month?), to have insurance against a procedure over 50k ie.cancer/massive trauma. if the govt wanted to proceed with this small measure of setting up the rates, so be it. They don't want to pay 150-200 a month so they can go to the doctor everytime they sneeze. As it stands the reason 30-40 million don't want insurance is becuase they don't care for a doctor unless they are dying. Insurance is a waste for them.

pull in 20 million of them, charge 30 bucks a month, you get 7.2 billion usd for the pool.
cancer rates by age?
http://www.nia.nih.gov/ResearchInformation/ConferencesAndMeetings/WorkshopReport/Figure1.htm

'im looking in the 25-45 range, which correlates with the uninsured segment, average cancer rate is 'roughly' 130/100k.
so-20 million/100k*130=26k.

7.2 billion/26k provides for avg tx cost AVAILABLE of 277k per pt(cancer alone). The average cost is going to be significantly lower, and very well could support, at least in large part, cost of trauma care.

The most striking advantage of providing catastrophic insurance to a reasonably healthy group is that you can make money, and provide an invaluable service. The govt, should not be forcing people to buy waht they don't want. offering ala carte, might work.

does it resolve healthcare?
nope. does it kill the talking point about 40 million plus uninsured? yep. does it open a pandora's box where healthy people are given the choice of how much and what type of insurance they want, reducing the amount available to waterdown the rates for those who get more than their money's worth? hell yeah.

as for social security...graduate the payout to be achieved from 62-70. drop the front end and move it to the backend. a 10% reduction for those who retire before 65, with a 10% increase for those at 70...

you are going to have more 62 year olds enter, than 70 year olds left, so the govt pockets the change.

[anon]

Bob,

You can't. That's the short answer, that's something I've been trying to communicate to your 'universal health care/single payer' brethren and they don't get it.

Managed care started under exactly the premise that preventative care would save money down the road, and as we found out, whatever money it might save isn't equalized out, that's why they ended up having to heavily ration health care for everyone. I'll tell you another secret, when the managed care companies tried selling products for seniors, most of them couldn't make it work AT ALL, because seniors are expensive to care for, and no amount of preventative care is going to alter that.

Me, I don't think Obama has the stomach to cut $$ from the actual caregivers--doctors, hospitals, etc. or possibly even the drug companies. His plan is based on the idea that electronic medical records is going to save an astronominal amount of money and that is simply NOT TRUE. They may marginally improve health care and cut down marginally on duplicate tests, but they are no panacea.

However, if you look at the stats a huge percentage of overall health care is spent on end of life care...much of that is needlessly prolonging the life of people who are 70 or older...it costs a ton of money, gives little back in return and arguably decreases the quality of life for seniors, but trying to make changes to that mode of care is going to be virtually impossible as well, since most physicians and caregivers already know that heavy medical intervention for the very sick is stupid, they do it anyway, lest we all be called Nazis out to cull the old folks.

I agree w/Mark that a lot of the uninsured are uninsured not because they absolutely cannot afford health care, but because they believe it is not affordable enough to pay for what they are getting...

I also believe that if you look a little further into the statistics those '40 million' contain a lot of people who are uninsured for only a few months between jobs...it isn't quite as dire a picture as is painted.

And, let me pat myself on the back and say that just as I predicted they are ALREADY floating the idea of taxing the people who have employer supplied health care...

I've said this before, if you have to control the cost of X, whether it is a wiget or health care there are only two ways to do it, either you find a way to make X itself cheaper or you buy less of X. So, when you translate that to health care, if you want to make health care cheaper then you're going to have to cut jobs and pay for health care workers, that includes caregivers and the insurance co's or you are going to have to ration it on the patient end. There is simply no other way.

[seekeronos]

I think employer-supplied health care will go the way of the dodo-bird eventually.

It will then be a matter of private-sourcing health care options through HSA's (Health Savings Accounts) which may or may not be partially funded (in matching schemes similar to what is done with vested IRAs)... or outright socialised medicine ala the British or Japanese models, with options for private co-insurance on top of that.

[seekeronos]

This is not necessarily a bad thing on the end-user/wage-earner's part: that part of a wage-earner's wages would increase significantly (as both his deductions for his premiums as well as the proportion of the premium paid for directly by his employer) are freed up.

The thing then would be to have a tax shelter to maintain that newly freed revenue in HSAs or similar vehicles to be used with health care.

[Nishner]

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=1

[Bob]

Thanks for your thoughts, mark and anon. And thanks for the link, Nishner. That was an interesting article. I liked this paragraph from the New Yorker article about "overutilized" medical care:

"Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later?"

And it continues:

"When it comes to making care better and cheaper, changing who pays the doctor [i.e. private insurance vs. the government] will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes."