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Tea Party Clarity on the Deficit

Posted on October 18 2010 11:00 am
Jon N. Hall is a programmer/analyst from Kansas City.

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Despite the hegemonic control they’ve enjoyed since January 2009, including a filibuster-proof majority from July of that year until the election of Scott Brown, Democrats continue to blame George W. Bush for everything, especially the budget deficit. And because the deficit has become such a huge issue, especially for the Tea Party, Democrats trot out the “Clinton surpluses” from 1998 through 2001.

But were there any surpluses? A glance at Treasury Department web pages shows a rise in the total debt for each of the four years in question. How can the debt go up if there’s a surplus?

For total debt not to rise in a fiscal year, two conditions must be met. First, every penny of off-budget surplus, if any, must be used to retire public debt. Second, there can’t be an on-budget deficit, even if the off-budget surplus can cover it. (See note below.)

Assuming both conditions obtained, the amount that total debt goes down would be equal to the amount of on-budget surplus used to retire public debt. At least that’s how it should work. But there are certain discrepancies in federal records.

According to the Office of Management and Budget, there have only been two years in the last 50 in which the feds ran an on-budget surplus: 1999 and 2000. Those two fiscal years registered on-budget surpluses of $1.9B and $86.4B, respectively.

Detail of OMB’s Table 1.1 (PDF version) for 1998-2001:

The OMB chart above is for the four years of supposed budget surpluses. If the feds had used all the surpluses to retire public debt, total debt would have gone down by $26B and public debt would have gone down by $559B. But Treasury says otherwise.

Daily History Search Application: last business day of the fiscal year (source):

According to Treasury, public debt went down by only $450B, a discrepancy of $109B. And the trust funds are larger than they should be, having a discrepancy of $311B. But the sum of these two discrepancies is $420B — the exact amount the total debt is “off.” Discrepancies aside, the public debt did in fact go down, and significantly.

Appearing on Meet the Press on September 19, former President Clinton said: “The debt was quadrupled in the 12 years before I became president and then we paid down the debt for four years, paid down $600 billion on the national debt, and then my budget was abandoned and they doubled the debt again.”

The use of the passive voice in “was quadrupled” and in “was abandoned” is telling. (“Was quadrupled”? By whom?) Also troubling is the last clause: Who is this “they”?

What really rankles is “my budget.” These two words are just insulting, for in America it is Congress that is responsible for the federal budget, not the president. As economist Thomas Sowell explains: “No president of the United States can create either a budget deficit or a budget surplus. All spending bills originate in the House of Representatives and all taxes are voted into law by Congress.”

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