D-Day on the Debt Ceiling (Update: The president speaks)
The GOP House caucus leaders gave a brief press conference a few minutes ago as I write this, showing a very unified front on the debt ceiling talks. Their message was two-fold: No tax increases, and the president needs to step up and lead already. They noted that the president doesn't seem to have a plan, which isn't exactly news, and that it's time to act -- also, not exactly news.
They delivered the press remarks to get out ahead of the president's own speech, planned for later in the morning. He is likely to pin the blame for the impasse on the Republicans. But it's worth remembering just how we got to this point in the first place. Take it away, WSJ:
On spending, it is important to recall how extraordinary the blowout of the last three years has been. We've seen nothing like it since World War II. Nothing close. The nearby chart tracks federal outlays as a share of GDP since 1960. The early peaks coincide with the rise of the Great Society, the recession of 1974-75, and then a high of 23.5% with the recession of 1982 and the Reagan defense buildup.
From there, spending declines, most rapidly during the 1990s as defense outlays fell to 3% of GDP in 2000 from its Reagan peak of 6.2% in 1986. The early George W. Bush years saw spending bounce up to a plateau of roughly 20% of GDP, but no more than 20.7% as recently as 2008.
Then came the Obama blowout, in league with Nancy Pelosi's Congress. With the recession as a rationale, Democrats consciously blew up the national balance sheet, lifting federal outlays to 25% in 2009, the highest level since 1945. (Even in 1946, with millions still in the military, spending was only 24.8% of GDP. In 1947 it fell to 14.8%.) Though the recession ended in June 2009, spending in 2010 stayed high at nearly 24%, and this year it is heading back toward 25%.
This is the main reason that federal debt held by the public as a share of GDP has climbed from 40.3% in 2008, to 53.5% in 2009, 62.2% in 2010 and an estimated 72% this year, and is expected to keep rising in the future. These are heights not seen since the Korean War, and many analysts think U.S. debt will soon hit 90% or 100% of GDP.
Congress controls the purse strings, and the spending run-up occurred when the Democrats controlled both houses of Congress and the White House. I'm sure everyone here in the Tatler audience knows that, but it's worth a reminder and mentioning to friends and such who don't hang on every headline. The Democrats love to pin the blame for the nation's debt crisis on George W. Bush, but they took his excessive spending and turned it up to 11. As I used to say when confronted about this question as a GOP comms director, the answer to too much spending is not to pile on more spending -- unless you're one of today's Democrats.