With federal deficits already running amok, it is unclear how President Bush will pay for his second-term agenda, a potentially multitrillion-dollar smorgasbord that includes overhauling Social Security and revamping the tax system.Here's one of the scary thoughts:
Bush laid out lofty goals Thursday at his first news conference since his Election Day triumph. He said he wanted to buttress Social Security, simplify the tax system, strengthen the economy, fight terrorism, bolster education, and battle AIDS and poverty abroad.
"I earned capital in the campaign, political capital, and now I intend to spend it," the president said.
Bush could decide to simply borrow the needed money, which would drive deficits higher, "and the real economic consequences of such a binge would come after he leaves office,"according to Robert Bixby, executive director of the bipartisan Concord Coalition.
Social Security is going to be a huge problem.
On the surface, things look fine for a few decades. The Social Security Trust Fund has nearly $2 trillion in it, enough to pay benefits until 2042.And the President plans to increase spending?
But the problem is that the fund contains little cash. Most of the $2 trillion is in IOUs from the federal government, which annually taps billions of dollars from the trust fund to mask the size of growing general fund deficits.
Writes Edmund Andrews of the New York Times:
But now that the race is over, perhaps you can explain some of the trickier economic issues that you glossed over in your quest to win. Let's start with the federal budget, which crumbled from a surplus of $236 billion in 2000 to a deficit of $413 billion this year. You have promised to cut the deficit in half by the time you leave office, mainly by cutting spending.Good question.
Exactly which spending cuts do you have in mind? Federal spending has soared by more than 15 percent since you took office, after adjusting for inflation. Your Republican allies controlled both houses of Congress during most of that period. You never vetoed a single bill. So which part of the spending didn't you like
So, what are we left with? We're left with a President who claimed that Kerry's budget notions were unreasonable and would put the country into debt; that Kerry couldn't do all he wanted to do without borrowing from the future. And now, it appears the President is following down that exact path. And our children will be paying for today's excesses.
That is not political capital that I want spent.