Who’s to blame for deficits? Bush, Obama, or both?
February 17, 2010Jon Brooks Comments OffSpeaking of the U.S. debt, as we did in our last post — Keith Hennessy, who was a senior White House economic advisor to President George W. Bush, wrote a lengthy post on his blog a couple of weeks ago criticizing President Obama’s description of the Bush years as a “decade of profligacy.”
One argument, relating to the Bush-era tax cuts:
It is true that President Bush proposed, and in 2001 and 2003 the Congress passed and President Bush signed into law significant tax cuts, and that those tax cuts were not offset by spending cuts or tax increases. If President Obama believes that enacting these tax cuts without offsetting their deficit impact was profligate, then why is he proposing to do the same thing? His budget proposes to change the law to extend all of the Bush tax cuts except those Team Obama mislabels as “for the rich.” He is not proposing offsets for those tax cuts he would extend. It is inconsistent to argue that Bush was irresponsible when he did it, and that Obama is responsible when he does the same thing.
Jonathan Chait of The New Republic wrote a rebuttal to Hennesey called “Rehabilitating Bush.” On Hennessey’s above-mentioned issue of the tax cuts, Chait writes:
This is sophistry. First of all, Hennessey waves off the portion of the Bush tax cuts that only benefit people making more than $250,000 a year, but there’s a lot of money there, so Obama’s determination to let them expire represents a significant difference with Bush.
Now, it’s true that Obama is keeping in place the tax cuts that benefit people who make under $250,000. But to equate that decision with enacting the tax cuts in the first place is absurd. Both public opinion and the political system have a huge bias toward the status quo. Once the Bush tax cuts were in place, anybody opposing them became a tax hiker. Hennessey understands perfectly well that Obama could easily maintain Clinton-era tax rates on the middle class if Bush had never cut taxes. Since Bush did cut taxes, restoring those rates in the face of unwavering GOP opposition would be a near-impossible task for Obama.
Now, Hennessey has responded in a new post. Regarding the overall strategy of continuing to cast blame on the Bush administration, he writes:
Even if I were to grant Team Obama’s characterization of what they inherited, they have the power to propose solutions. With enormous supermajorities in the House and Senate and a reconciliation process, they have the power to enact policies to improve the outcome, even if Republicans don’t play ball. They have so far not done so. I believe that at some point, failing to even propose policy solutions to a problem you argue you inherited makes the problem yours. Inaction is a choice which accrues responsibility over time.
