I wanted to share some excellent information I found on the budget, deficits, and more. If the material goes by too quickly for you, you can go to the website and review the slides at your own pace. Whoever prepared this presentation certainly has a point of view, but does the data lie?
To see the actual slide show presentation go to: http://www.connectthedotsusa.com/federal-budget.html
An article on Bloomberg.com summarized the financial mess we’re in very nicely and concisely. Interestingly, Medicare and Social Security are not mentioned as causes of the skyrocketing deficit and debt of the United States government.
Below are excerpts from the Bloomberg article. The full article can be found here.
The 2001 and 2003 tax cuts, which lowered tax rates on income, dividends and capital gains, increased the federal budget deficit by $1.7 trillion over a decade, according to the Center for Budget and Policy Priorities, a non-partisan left-of- center group in Washington that studies fiscal policy.
The two-year extension of those tax cuts that Obama signed will cost $857.8 billion, according to the Congressional Joint Committee on Taxation.
The wars in Afghanistan and Iraq have cost almost $1.3 trillion since the terrorist attacks on Sept. 11, 2001, according to a March 29 analysis by the Congressional Research Service.
The 2003 Medicare prescription program [Part D] approved by President George W. Bush and a Republican-dominated Congress has cost $369 billion over a 10-year time frame, less than initially projected by Medicare actuaries.
TARP, the $700-billion bailout of banks, insurance and auto companies, has cost less than expected. McConnell, Boehner, Cantor and Ryan all voted in October 2008 for the program, which stoked the rise of the Tea Party movement. ….Many institutions have repaid the government. The latest estimated lifetime cost of the program is $49.33 billion, according to a June 2011 report by the Treasury Department
Together, a Bloomberg News analysis shows, these initiatives added $3.4 trillion to the nation’s accumulated debt and to its current annual budget deficit of $1.5 trillion.
In 2010, Part D drug coverage made up 13.4% of the Medicare budget, or $68 billion. So even with seniors paying premiums for their Part D plans that ranged from $1o to $90 per month, Medicare still paid out $68 billion in 2010 to subsidize their drug costs.
Bruce Bartlett, who worked in the Treasury Department under Bill Clinton, wrote about the budget busting consequences of Part D in Forbes magazine in 2009. Excerpts from his column are provided below:
The human capacity for self-delusion never ceases to amaze me, so it shouldn’t surprise me that so many Republicans seem to genuinely believe that they are the party of fiscal responsibility. Perhaps at one time they were, but those days are long gone.
This fact became blindingly obvious to me …. when a Republican president and a Republican Congress enacted the Medicare drug benefit, which former U.S. Comptroller General David Walker has called “the most fiscally irresponsible piece of legislation since the 1960s.”
Recall the situation in 2003. The Bush administration was already projecting the largest deficit in American history–$475 billion in fiscal year 2004, according to the July 2003 mid-session budget review. But a big election was coming up that Bush and his party were desperately fearful of losing. So they decided to win it by buying the votes of America’s seniors by giving them an expensive new program to pay for their prescription drugs.
Recall, too, that Medicare was already broke in every meaningful sense of the term. According to the 2003 Medicare trustees report, spending for Medicare was projected to rise much more rapidly than the payroll tax as the baby boomers retired. Consequently, the rational thing for Congress to do would have been to find ways of cutting its costs. Instead, Republicans voted to vastly increase them–and the federal deficit–by $395 billion between 2004 and 2013.
Bruce Bartlett was a Democratic appointee. The full Forbes article can be read here.
In the video below, David Walker, Comptroller General under George W Bush, talked about the budget and deficit consequences of the Part D drug program which began in 2006.
