Deficit Hawkoprite Watch

By James Kwak

Sometime this spring, Congress is going to have to raise the debt ceiling or the federal government will face default. Republicans are going to demand many, many pounds of flesh in exchange, ranging from cuts in discretionary spending to rethinking of entitlement programs, which together could undermine the weak stimulative effect of the December tax cuts. Democrats are probably going to give in to at least some Republican demands for two reasons: politically, they fear that they would be held accountable for a default because the public still associates spending with Democrats, and they hold the White House; pragmatically, they are just not as crazy as the Republican right, and in most negotiations the crazy party gets a better deal. Of course, this is insane. The deficit problem was created by Congress, through its many votes to increase spending and decrease revenues (otherwise known as taxes). As James Hamilton put it: One of the peculiar embarrassments of the American political process is the fact that Congress votes separately on the deficit and debt, as if they were two different decisions. . . .

“A politician who votes for the spending and tax measures that produced the deficit but against a debt ceiling consistent with these is deliberately wasting taxpayer dollars for no purpose other than to grandstand before voters as a ‘fiscal conservative’. Anyone playing such a game has complete contempt for the intelligence of their constituents.”
I know this is a bit early, but I wanted to get some facts out there in advance of the debate. I picked five major bills in the past decade that have significantly increased the national debt: the 2001 tax cut, the 2003 tax cut, the 2003 Medicare prescription drug benefit, the 2009 stimulus, and the 2010 tax cut. (I left out the Afghanistan and Iraq Wars because it’s hard to pin down Congressional votes specifically authorizing their costs, in part because the famous Senate vote wasn’t actually a vote to go to war, in part because of the peculiar way the costs of the wars were budgeted.) Then for each of those bills, I looked up the CBO budget impact estimate made at the time. (Sources are at the bottom of this post.) Their costs, as projected at the time (and hence as knowable by members of Congress), were as follows. The first number is the ten-year cost; the number in parentheses is the portion of that cost through fiscal year 2011. Numbers are in billions.

•2001 tax cut: $1,346 ($1,346)
•2003 tax cut: $350 ($354 — the cut has a tiny deficit-reducing impact in its final years)
•Medicare Part D: $395 ($271). Note that I am not including the fact that the cost of this bill was almost immediately reestimated after it passed to be significantly higher, since that was not knowable to members of Congress when they voted.
•2009 stimulus: $838 ($793)
•2010 tax cut: $858 ($374)
That’s a total of $3.8 trillion — $3.1 trillion of it hitting the national debt by this year, and hence contributing directly to the need to raise the debt ceiling.

Then I looked up how current senators voted on these bills, whether they were in the Senate or the House at the time. For each senator, I added up how much of the current (2011) debt he could have voted for, and how many he did vote for. So, for example, Daniel Akaka (D-HI) was in the Senate for all five votes, so he was on the floor for $3.1 trillion in budget-busting bills; he voted for the last two, so he voted for $1.2 trillion, or 37 percent of what he could have voted for. The results are predictable, but I still think worthy of noting, especially with all of the grandstanding that is going to happen. Overall,
current Democratic senators (including Sanders and Lieberman) had the opportunity to vote on $127 trillion of additional debt, and voted for $64 trillion, or 50 percent; current Republican senators had the opportunity to vote on $104 trillion of debt and voted for $70 trillion, or 67 percent. The difference would have been greater except for trends in the composition of the Senate. Of current senators, the proportion in each party voting for each bill is as follows:

•2001 tax cut: Democrats 18%, Republicans 93%
•2003 tax cut: D 3%, R 94%
•Medicare Part D: D 17%, R 88%
•2009 stimulus: D 100%, R 5%
•2010 tax cut: D 77%, R 87%
So the typical Democratic vote pattern is N-N-N-Y-Y (I counted “present” and not voting as no votes — there were very few of these, anyway), which would mean voting for 37 percent of the total debt produced by these bills (just like Daniel Akaka). In fact, thirty-four Democrats were able to vote on all five bills, and twenty of them voted that way.

The typical Republican vote pattern is Y-Y-Y-N-Y, which means voting for 75 percent of the total debt. And, of the twenty-seven Republicans around for all five bills, eighteen of them voted that way.

http://baselinescenario.com/2011/01/17/deficit-hawkoprite-watch/