The contenders adding to deficit

Orlando Sentinel
Associated Press

May 06, 2008 09:45 am

— The federal budget deficit is back up and expected to top $400 billion this year and next. If the next president doesn't chart a more fiscally responsible course, benefits for retired baby boomers and rising health-care costs will push deficits into the stratosphere.
Borrowing to cover those deficits will increase already-high interest payments and crowd out investments that would make the United States stronger and more prosperous. It will make the country even more dependent on foreign creditors such as China.
Yet none of the presidential candidates' tax and spending plans acknowledge this reality. Independent budget analysts say proposals from Republican John McCain and Democrats Hillary Clinton and Barack Obama would deepen deficits, leaving the U.S. in even worse shape to weather the fiscal storms ahead.
Analysts from the nonpartisan Tax Policy Center calculate McCain's plan would add $5 trillion or more to the $9 trillion national debt over the next decade, mainly from new tax cuts. The plans from Clinton and Obama, heavy on new spending, also would swell deficits.
Clinton and Obama say they would raise at least $50 billion a year for new spending by letting some of the Bush tax cuts expire on schedule. But that revenue is counted toward deficit reduction in budget forecasts. Spending it would add to deficits.
Clinton would raise tens of billions more through corporate tax hikes and unspecified cuts in Medicare and Medicaid spending. Obama also would tax corporations, and he counts savings from ending the Iraq war and cuts in some programs. The sum of their proposals, even if they all panned out, would not fully fund ambitious plans that include expanding health-insurance coverage, developing alternative energy and increasing education funding.
Obama and Clinton narrowed their options for cutting the deficit and closing funding gaps in Social Security and Medicare last month when they ruled out raising taxes on Americans making less than $200,000 to $250,000.
Goals such as improving health care and education and making the tax system more competitive are worth pursuing, but not if there's no money to pay for them. We can only hope that the three presidential candidates' tax and spending plans represent campaign pandering instead of serious fiscal blueprints.