WASHINGTON — After eight years of Bush administration budget practices that often camouflaged federal spending, President Barack Obama is planning a new strategy of putting on the books as many costs as possible to demonstrate the extent of the nation’s economic troubles, senior White House officials say.
The approach is in contrast to the previous administration, which often tucked such costly commitments as the Iraq war into separate spending requests that would go to Congress later.
“The president is determined to treat the American people as adults and be straight-up about what we’re facing and what we need to do to move forward,” said David Axelrod, senior adviser to the president.
The new approach could make it easier for him to keep his promise to cut the federal deficit in half by the end of his first term. By starting with a huge deficit now, he could slash spending in his fourth year. By then, costs such as stimulus spending, war appropriations and others probably would be gone or sharply reduced.
For years, the White House and Congress have danced around the federal deficit. The president would release a budget in February that would show declining deficits into the future. But that budget would exclude most war costs and use several unrealistic assumptions, including over-optimistic predictions of economic growth and rising federal revenues.
“There were significant costs that were excluded from the budget because the Bush administration pretended that certain policies that every one knew would continue wouldn’t continue,” said Jim Horney, a budget expert with the Center for Budget and Policy Priorities.
For budget reasons, the Bush administration continued to assume that the alternative minimum tax — for which lawmakers pass a relief package every year — would take effect in future years, unrealistically raising tax-revenue assumptions by nearly $1 trillion over 10 years.
Similarly, every year the Bush administration issued an initial deficit projection that was much higher than other economists’ projections. That way, when the final deficit count was released, the administration could claim it had brought the deficit down.
Deficits accumulated each year that President George W. Bush was in office, from $158 billion in fiscal 2002 to $455 billion in 2008, totaling roughly $2.5 trillion.
As he opened a fiscal summit with lawmakers and budget experts Monday, Obama emphasized the role that health-care costs are playing in the deficit, calling it the “single most pressing long-term fiscal challenge we are facing, by far.”
In fact, by 2018, more than 51 percent of all health-care spending in America will be done by federal, state and local government, totaling some $2.2 trillion, according to the latest estimates being released today by the Centers for Medicare and Medicaid Services. In 2008, the government accounted for an estimated 46.6 percent of the nation’s health-care spending, with the majority provided by consumers and private insurance companies.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
