Yes. We must address the very serious problem of a $16 trillion national debt and a $1 trillion federal deficit.
But at this pivotal moment in American history, it’s essential that we understand how we got into this deficit crisis in the first place and who was responsible for it. More important, we must address the deficit in a way that is fair and does not balance the budget on the backs of the elderly, the children, the sick and the poor — people who are already hurting.
Let us never forget that when Bill Clinton left office in January 2001, this country enjoyed a healthy $236 billion surplus, and the projections were that this surplus would grow by a total of $5 trillion over a 10-year period.
What happened? How did we go from a significant federal budget surplus to a massive deficit? Frankly, it is not that complicated.
President George W. Bush and the so-called deficit hawks chose to go to war in Afghanistan and Iraq and put the funding for those wars on our nation’s credit card. By the time the last wounded veteran is cared for, those wars will end up adding more than $3 trillion to our national debt.
During this same period, Bush and the “deficit hawks” provided huge tax breaks to the wealthiest 2 percent of Americans who were already doing phenomenally well. These tax breaks for the very rich will increase our national debt by about $1 trillion over a 10-year period.
In addition, Bush and the “deficit hawks” established a Medicare prescription drug program written by the pharmaceutical and insurance industries. This program, which is far more expensive than it should be because it prohibits the federal government from using its purchasing power to negotiate cheaper drug prices, was not paid for. As a result, about $400 billion will be added to our national debt over a 10-year period.
Further, as a result of the deregulation of Wall Street, and the greed, recklessness and illegal behavior of the major financial institutions, this country was driven into the worst recession since the 1930s, which resulted in a massive reduction in revenue coming into the federal government.
And now, as we approach the election and a lame-duck session of Congress, these very same Republican “deficit hawks,” the folks who, to a significant degree, created the deficit crisis, are presenting some horrendous ideas about how we should get out of the mess that they caused. Sadly, they have been joined by some Democrats.
First, in order to cover the cost of the unpaid-for wars in Iraq and Afghanistan, they want to make significant cuts to Social Security that will affect not only seniors but disabled veterans as well. They want to do this despite the fact that Social Security is funded by the payroll tax, has not caused the deficit and has a $2.7 trillion surplus. Their favorite approach to cutting Social Security is through a reformulation of the way cost-of-living adjustments are calculated through the creation of a so-called chained consumer price index. Enacting this policy would result in a $560-a-year cut in Social Security benefits for 65-year-olds once they turn 75 and about a $1,000-a-year cut when they reach 85. The chained CPI will also make substantial cuts to the benefits of more than 3 million veterans, with the largest cuts affecting young, permanently disabled veterans who were seriously wounded in combat.
Second, in order to cover the cost of tax breaks given to millionaires and billionaires, they want to increase the Medicare eligibility age from 65 to 67 and throw millions of families with children off of Medicaid.
Third, in order to cover the cost of the Medicare prescription drug program, they want to cut Pell Grants, student loans, nutrition and other programs vitally important to working families.
Fourth, at a time when the United States has the most unequal distribution of wealth and income of any major country and the gap between the very rich and everyone else is growing wider, their deficit-reduction plan calls for lowering the top tax rates for the rich to about 28 percent or even lower.
Fifth, while the United States military budget has virtually tripled since 1997 and we now spend nearly as much as the rest of the world combined on defense, they want to increase defense spending.
There are fair and sensible ways to reduce deficits, but balancing the budget on the backs of the weak and vulnerable while lowering tax rates for the rich and increasing military spending are not among them.