Cox News Service
WASHINGTON — Early in 2001, the fledgling Bush administration unveiled its first federal budget, calling for dramatic tax cuts amid surging revenue surpluses.
President Bush assured the nation it could look forward to annual budgets that would be "balanced for 10 consecutive years" and retire "an unprecedented $2 trillion in debt."
But it didn't work out that way. The country has never had a balanced Bush budget.
On Monday, he presented his final $3.1 trillion budget that envisions a near-record deficit of $407 billion in fiscal 2009. Still, he is urging Congress to turn his 2001 and 2003 tax cuts into a permanent legacy, saying his fiscal approach is a "formula for achieving a balanced budget."
Historians and economists may spend years debating how Bush, who took office expecting nearly $5.6 trillion in surpluses over the coming decade, instead presided over eight years of deficits that will drive the national debt to nearly $10 trillion.
Bush's fiscal record "is not a proud part of the administration's legacy," said Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group. "His fiscal policies have left us in worse shape than when he came into office."
"A perfect fiscal storm awaits the next president," Bixby said.
Bush defenders say the nation's deteriorating fiscal condition reflects a series of unavoidable expenditures involving the Sept. 11, 2001 terrorist attacks, Hurricane Katrina, a 2001 recession with roots in the Clinton era, and the wars in Iraq and Afghanistan.
The president's supporters also say his tax cuts spurred the economy to grow quickly enough to pay for unexpected military and emergency expenses while holding deficits to a manageable level. They note that as a percentage of gross domestic product, the deficit in this fiscal year will be 2.9 percent and 2.7 percent the following year.
On Monday, White House budget director Jim Nussle told reporters that in 1983, the Reagan administration had a deficit equal to 6 percent of GDP. Thanks to this administration's tax cuts, deficits have been far below historic highs because "revenue was quite strong during these past number of years," Nussle said.
Critics say the administration has set the wrong fiscal direction for the long term by pushing for excessive taxes cuts for the wealthiest Americans, failing to veto wasteful spending by Congress, choosing to launch a war in Iraq and failing to strike a deal with Congress to restrain entitlement spending.
Even some top Republicans have been critical of Bush spending policies. Sen. John McCain of Arizona, the GOP presidential front-runner, told the Wall Street Journal recently that when historians examine the Bush presidency, they will "judge him harshly on the spending point of view."
The White House continues to insist the budget deficit will disappear and surpluses resume by 2012, long after Bush leaves office.
Critics say such projections are wildly optimistic. Bush's latest budget includes only $70 billion for the fighting in Iraq and Afghanistan, which is widely expected to be a drain on the nation's coffers for many years.
The Bush budget also reflects just a one-year extension of a "patch" for the alternative minimum tax. Over time, the cost of fixing that unpopular tax system quirk will be far higher.
Bush's budget also is based on optimistic forecasts for the economy. The administration sees economic growth of 2.7 percent this year, with a 3 percent gain next year. Many economists believe the outlook is much less rosy, with some predicting a recession this year.
To hold down spending, Bush is proposing almost no growth in domestic outlays in 2009. He also wants to cut $603 billion from Medicare and Medicaid over 10 years.
Even if the balanced budget Bush envisions by 2012 were to materialize, it would be short-lived. Deficit spending soon would resume as more and more of the nation's 76 million baby boomers move into retirement. The Concord Coalition estimates the shortfall in Social Security and Medicare through 2080 will total $72.3 trillion.
With Democrats controlling Congress, the White House's budget has little chance of being enacted as written.
"This budget will be quickly forgotten," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "But, unfortunately, the president's legacy of debt will stay with us, as it is passed on to future generations. His stewardship of our budget has been an utter disaster."
House Minority Leader John A. Boehner, R-Ohio, said in a statement, "Instead of criticizing the president's budget, congressional Democrats would be well-served to join the president and Republicans in funding our nation's priorities while protecting middle-class families and small businesses from a massive tax hike in 2010."
Next year, a new administration will toss out the Bush priorities to establish its own. The incoming president will have to plunge immediately into reforming Social Security and Medicare. "We kicked this can down the road about as long as it can be," Conrad said a recent budget hearing. "It will absolutely bedevil the next administration."
THE CLOUDY CRYSTAL BALL
President Bush's initial estimates of annual federal deficits have turned out to be far off the mark, largely due to the impossibility of predicting future events such as the 9/11 attacks, the Iraq war and economic downturns.
....................Initial
....................Bush Estimate of........Actual
Fiscal Year.....Surplus or (Deficit).....Surplus or (Deficit)
2002.............$231.2 billion............($157.8 billion)
2003.............$242.0.....................($375.3)
2004.............$262.1.....................($412.1)
2005.............$269.0.....................($318.3)
2006.............$304.8.....................($248.2)
2007.............$103.9.....................($162.0)
2008.............($189.6)...................(estimated $410.0)
2009.............($407.4)
Source: Office of Management and Budget
Marilyn Geewax is a Washington correspondent for Cox Newspapers.