[ Send this story to a friend | Easy-print version ] How Bush is fudging the debt

By Thomas Oliphant, 3/11/2001

WASHINGTONWITH A KEEN EYE for detail, Representative Gene Taylor, Democrat of Mississippi, has spotted the first move in the Bush administration's assault on one element of responsible behavior that the new, moralizing crowd opposes - paying your debts and keeping your promises.

As so often happens in public life, it is aimed at clarity in language.

Until President Bush came along, the Treasury Department called one of its arcane publications ''The Monthly Statement of the Public Debt.'' Taylor, the Gulf Coast's very conservative congressman, has noticed that in one of its first acts, the Bushies renamed it ''The Monthly Statement of Treasury Securities.''

To oversimplify some, accounts that were previously considered a component of the swollen national debt are now listed as ''intragovernmental holdings.''

This sneaky use of euphemism to disguise debt on which interest must be paid - and, ultimately, principal - sacrifices accuracy for propaganda. After all, as Taylor says, ''If we are going to rename them why not call them what they are: IOUs?''

The answer lies at the heart of President Bush's attempt to jury-rig the government's finances to make the square peg of tax cuts worth $2.6 trillion over the next decade fit into the round hole of credible financial statements.

To oversimplify some more, Bush's domestic policy is based on the need to keep raiding trust fund surpluses as far as the eye can see. The newfound religion on Social Security that Republicans and Democrats have embraced after nearly 20 years of sin masks an underlying reliance on the same, dangerous opiate.

Taylor was one of the conservative Democrats' main players in last week's silly debate on the income tax rate component of Bush's tax plan in the House. Indeed, the conservatives who provided the party's most significant rhetoric - both on policy grounds and in anger that the president violated his own civility edict by declining to respond to their concerns.

In the end, the income tax rate cuts got 10 Democratic votes. But on the critical choices - whether to accept a no-amendment debate rule and whether to ship the bill back to committee to await an overall budget as the law requires - Bush got just three and two Democrats respectively. Moreover, the solid phalanx of Republican votes masked the views of numerous moderates - more than covering the victory margin - that while they were willing to give their rookie president a meaningless vote now, they will insist on major modifications later.

And that middle-ground sentiment is already on public display in the Senate.

In two spirited speeches on the House floor and in his Web site, Taylor notes that last year's total budget surplus of $237 billion was almost entirely ($229 billion) accounted for by the government's trust funds. Outside them, the operating surplus was a puny and precarious $8 billion. Through January, non-trust fund accounts were nearly $16 billion in the red.

Some attention has been paid recently to the $3.4 trillion in debt held by the public, mostly because Bush wants to pay down less of it than nearly all experts believe is possible. But Taylor's contribution is to focus on the $2.3 trillion owed to the trust funds, money borrowed for the rest of the government over the years.

That includes some $2 trillion in Social Security debt, another $230 billion from Medicare's trust funds, and more than $700 billion in military, civil service, and unemployment accounts. Instead of being set aside to prefund benefits, these monies have been ''borrowed'' (stolen, some insist) by Republican and Democratic presidents and Congresses alike.

When the full brunt of baby boomer retirement hits, surpluses will become deficits and the debts will have to be retired, but no provision for that moment has been made. As Taylor puts it, ''Taxpayers in 2020 will find no significant difference between borrowing to pay benefits and borrowing (or taxing) to repay the trust funds so they can pay benefits.''

Meanwhile, the direction of debt overall is up. The total this year is $5.7 trillion, and it is designed to stay constant through 2008 (two Bush terms?) before exploding above $7 trillion a decade hence. Not coincidentally, more than two-thirds of the guesstimated federal surplus is also expected to appear in those years. The interest payments now are $1 billion-plus per day, a huge redistribution of wealth in the wrong direction from payroll taxpayers to bondholders, and that can only get worse when too much debt keeps interest rates too high for the economy's long-term health.

John McCain grasped this last year; conservative Democrats and moderate Republicans get it this year; now even liberals are aboard. Progressive values fit conservative fiscal thinking like a glove.

Thomas Oliphant's e-mail address is oliphant@globe.com.

This story ran on page E7 of the Boston Globe on 3/11/2001. © Copyright 2001 Globe Newspaper Company.

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-- Anonymous, March 22, 2001

Answers

Hi Pam! Bit quiet on this thread(eye roll). Course if BJ Bill had done similar all hell would have broken loose down here at the Poolie Roost no doubt.

Man I thought Y2k doom bunnies dim. These Repub supporters have them beat in spades.

-- Anonymous, March 22, 2001

I'd first like to thank Stephen for being unfailingly polite no matter how different our views are.

Stephen, you once called me 'fiscally conservative'. Took me awhile but I agree. I'd like to see balanced budgets and the debt paid down to nothing. This smoke and mirrors is annoying.

And I'd like to know if President Bush is what Republicans expected him to be in terms of the actions he has taken. Do you really want oil drilling in Anwar (sp?), 1942 water regulation on arsenic, a hands off approach to California's energy crisis, etc. etc.?

-- Anonymous, March 22, 2001

Doc--

I can't believe how rapidly things are changing in this country. It feels like 20 or 30 years ago. Very retro. And in just 2 months.

Further thoughts of a Y2k doom bunny: What with the stock market tanking, I may yet actually eat all those dried beans. [g]

-- Anonymous, March 22, 2001

Pam,

Me? Nice?

If Penn State beats Temple, I will become very hard to get along with. I may even start editing posts and *sigh*-ing.

You have been warned.

-- Anonymous, March 23, 2001

Pam,

Now for the (not-so) serious part. :)

(I will allow nothing to COMPLETELY displace my love for March Madness.)

And I'd like to know if President Bush is what Republicans expected him to be in terms of the actions he has taken.

Well, once again, for the record, I'm a registered Democrat. (On purpose.) I voted for Bush because I gave him a slight edge over Gore, but I wouldn't have considered it the end of the world if Gore had won, yadda yadda, surely you know my tune by now. :)

Speaking as a "libertarianish conservative-ish Christian who's-NOT-a member of the Religious Right ..."

(Hmmm. We need a label for this. I suggest "Dweeble." I am a DWEEBLE.)

... I haven't seen anything yet that is terribly outside of my expectations. Over my lifetime, I have held my nose and voted for Democrats, same as I've held my nose and voted for Republicans. Each time I do so, it is with the perfect understanding that they will do things that I like *and* dislike.

I have leaned toward Republicans in recent elections because they are a BIT closer to me on some issues (gun control, for example). But really, I'm frustrated that I have to choose them to get what I want, because they do plenty of other things that I *don't* like.

When faced with that choice, most Americans choose not to vote at all. I'd rather not do that; I'll go ahead and hold my nose, pick whom I think is the lesser of two evils at the end of the day, and vote anyway, because that at LEAST tells Washington that I'm paying attention.

So, that's the first point. I see no need to "defend" Bush, because I never expected him to be Mahatma Ghandi, Pitt the Elder and George Washington rolled into one. I expected him, at the end of the day, to do more of the things that I liked, but I knew that he would also do some things that I didn't like.

This isn't a toggle switch: either I'm 100% for him or a'gin him. That's too simplistic.

But here are some specific examples:

I dislike Bush's idea of a $500,000 cap on liability in the patient's right bill. Knowing what it costs to successfully prosecute a case of that type, that's WAY too low. As a conservative, I *do* support a cap, but I think that maybe $1-2 mil would be more realistic. The idea is to give patients recourse so that HMOs will become more concerned about seeing to it that their customers might actually SURVIVE their care, without creating another boondoggle that will simply make the trial lawyers rich.

And I dislike the new bankruptcy bill (I agree that reforms were badly needed, but that thing goes too far), but in that particular case, it's not just Bush's fault. Even if he were to veto it, the Republicans *AND* Democrats in Congress, who passed that bill because of all the credit card company money in their pockets, have enough votes to override.

On the other hand, I *do* support his tax cut, because I *do* believe that it works to spur the economy. Reagan's tax cuts WORKED. The reason why the deficit went up is simply because the government kept spending way beyond its means. There is a tendency to link the two for convenience and political purposes, but I can read numbers as well as anyone else.

Do you really want oil drilling in Anwar (sp?), 1942 water regulation on arsenic, a hands off approach to California's energy crisis, etc. etc.?

These are some of the hard decisions that we'll have to make, Pam. For example: we have GOT to become energy-independent. That's going to involve some compromises, which means that no one will get everything that they want. The environmentalists can forget about absolute, you-can't-touch-dis "hands-off" policies on needed energy, but at the same time, the oil companies can't expect to be able to go in and retrieve that energy without taking extensive measures to protect the environment.

And, we're back to the Republican v Democrat thingy again. The Republican tendency has been to just to let the oil companies drill "and we'll clean things up later." The Democratic tendency is to declare some things off-limits, even if we DO import more oil than ever before. A heck of a choice, from my point of view.

Sometimes I wonder if I should flip a coin.

Since this already too long, I'll leave it at that. Bright people can extrapolate my expatiation as needed themselves.

-- Anonymous, March 23, 2001

It has been 47 YEARS since we had a good B-ball team. Jessee Arnell is now a Trustee. I hope we knock the socks off Temple tonight. I'll take my chances with deleted posts. [g]

-- Anonymous, March 23, 2001

Pam,

Well, I was only kidding, and lest you think I should gloat, I really thought Penn would knock off Temple. I didn't know that Chaney would pull another rabbit out of his hat.

Penn has nothing to be ashamed of, though, and I suspect they'll be back next year. It'd be a nice thing to see them become tournament regulars along with Duke, Indiana, KA, KY and the rest of the Gang. :)

I really thought Ole Miss would take Arizona, too.

As a Duke fan, Stanford makes me nervous. :)

-- Anonymous, March 24, 2001

Hi Stephen--

Now THAT'S the Penn State basketball team I remember. Where we got those quick, scrappy ringers for the first two rounds I don't know.

We were hanging in there when I went to make some coffee and when I got back it was all over.

Thanks for the kind words and just you watch out in 2048!

-- Anonymous, March 24, 2001

Whats funny to me is that --

The same press that was touting what an experienced and balanced Cabinet President Bush was putting together; now is

Slamming every single policy that same all-star Cabinet is putting together.

Somebody's paying for all this, and the money changes weekly.

"I pledge allegiance to the flag...of the highest bidder."

-- Anonymous, March 25, 2001

And just what "press" would that be, C.L.? The Damn Evil Liberal Press?

ROTFLMAO.....you actually believe the stuff you post, don't you?

BTW, what exactly do you mean by "balanced...cabinet"? Surely you don't mean ideologically balanced, do you?

-- Anonymous, March 25, 2001

Whoops.....correction ahead:

You are correct in one thing you say, but not for the reasons I suspect you think:

Somebody's paying for all this, and the money changes weekly.

"I pledge allegiance to the flag...of the highest bidder."

You've just described the current "administration". rotflmao.....

-- Anonymous, March 25, 2001