An Era of Fiscal Irresponsibility

By Mike Lillis 06/11/2008 02:55PM

The Washington Post opinion columnist Ruth Marcus has a biting critique today of how Washington's policy makers -- both Democrats and Republicans; both in the White House and on Capitol Hill -- have crippled future generations with debt simply because they can't, or won't, make the tough budget decisions themselves. It's a timely piece, as House lawmakers are set to approve a $165 billion in emergency (ie, borrowed) funds for the wars in Iraq and Afghanistan.

By the time Congress finishes the latest "emergency" war spending bill, a mere seven years into the emergency, the cost of operations in Iraq and Afghanistan will have exceeded $860 billion. For the first time in American history, every penny of that amount will have been borrowed.

Against Republicans, the criticisms flow easily. The Iraq war is, after all, the child of the Bush administration. But it was the GOP Congress that pushed through the Bush tax cuts of 2001 and 2003. Those cuts, Marcus argues, defied historic tradition.

Confronting the debt amassed during the Revolutionary War, George Washington was determined to pay it off, warning against "ungenerously throwing upon posterity the burden which we ourselves ought to bear." Confronting the enormous costs about to be piled up in Iraq, George Bush determined to press for new tax cuts -- not just "little bitty tax relief," as he put it, but hundreds of billions more.

"This contrast -- between an active war effort on one hand and substantial tax cuts on the other -- has no precedent in American history," three tax historians explain in "War and Taxes," a new book from the Urban Institute. Rather, since the War of 1812, "special taxes have supported every major military conflict in our nation's history."

As Steven Bank, Kirk Stark and Joseph Thorndike show, presidents and lawmakers have not always been eager to impose taxes to pay war costs. But historically, Republicans and Democrats alike ultimately acknowledged the necessity -- fiscal and moral -- of shared sacrifice. "I think the boys in Korea would appreciate it more if we in this country were to pay our own way instead of leaving it for them to pay when they get back," said House Speaker Sam Rayburn.

Until Iraq, that is. "Nothing is more important in the face of a war than cutting taxes," then-House Majority Leader Tom DeLay declared in March 2003.

There's also a shot at likely GOP presidential nominee John McCain (Ariz.), whose campaign platform, as he seeks the support of skeptical conservatives, doesn't always mesh with past sentiments.

Take John McCain, who refused to back additional tax cuts in 2003 because, he explained, "throughout our history, wartime has been a time of sacrifice." Now, as his party's presumptive nominee, McCain offers a costly menu of new tax cuts that makes Bush look like Ross Perot.

But Democrats are complicit as well, pushing the dubious argument that, because the war is Bush's baby, it somehow shouldn't be Congress's responsibility to fund it. (Nevermind that Article I, Section 8, of the Constitution places the task squarely on the legislative branch.)

From the Democrats' perspective then, why take the political risk of pushing tax hikes to finance a Republican war? Last year, when three senior House Democrats floated an income surtax to pay for the war, leadership shot it down with Bush-like speed. "Just as I have opposed the war from the outset," said Speaker Nancy Pelosi, "I am opposed to a war surtax."

And then there's the Senate Democratic approach. Here's leadership's reason not to offset an updated GI Bill, which would run about $52 billion over the next decade.

"We believe if we can spend $170 billion on Iraq that we should spend $5 billion a year on the people coming back from Iraq," said Majority Leader Harry Reid. "I don't know why that would have to be offset."

Marcus concludes with an accurate bite.