DOUBLING DOWN ON PRESIDENT BUSH'S ECONOMIC POLICIES
March 19, 2009
President Obama has framed his budget as a break from the "failed policies" of the Bush Administration. Actually, his budget doubles down on President George W. Bush's borrow, spend and bailout policies, says Brian M. Riedl a researcher with the Heritage Foundation.
- President Bush expanded the federal budget by a historic $700 billion through 2008; President Obama would add another $1 trillion.
- President Bush began a string of expensive financial bailouts; President Obama is accelerating that course.
- President Bush created a Medicare drug entitlement that will cost an estimated $800 billion in its first decade; President Obama has proposed a $634 billion down payment on a new government health care fund.
- President Bush increased federal education spending 58 percent faster than inflation; President Obama would double it.
- President Bush became the first President to spend 3 percent of gross domestic policy (GDP) on federal antipoverty programs; President Obama has already increased this spending by 20 percent.
- President Bush tilted the income tax burden more toward upper-income taxpayers; President Obama would continue that trend.
President Bush ran budget deficits averaging $300 billion annually. After harshly criticizing Bush's budget deficits, President Obama proposed a budget that would run deficits averaging $600 billion even after the economy recovers and the troops return home from Iraq.
The President's tax policy is the only sharp break in economic policy. President Bush reduced taxes by approximately $2 trillion; President Obama has proposed raising taxes by $1.4 trillion. In doing so, President Obama has rejected the most successful Bush fiscal policy. In the 18 months following the 2003 tax rate cuts, economic growth rates doubled, the stock market surged 32 percent, and the economy created 1.8 million jobs, followed by 5.2 million more jobs in the next 27 months. Not until the housing bubble burst several years later did the economy finally lose steam. Pro-growth lawmakers should embrace tax relief policies that have proven successful, while rejecting the runaway spending that has been business as usual in Washington, says Riedl.
Source: Brian M. Riedl, "The Obama Budget: Spending, Taxes, and Doubling the National Debt," Heritage Foundation, Backgrounder No. 2249, March 16, 2009.
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