Cole Understates How Bush Tax Cuts Affected Debt

I went to a town hall meeting recently at the National Weather Center in Norman, Okla., held by U.S. Rep. Tom Cole (R-Okla.).
Cole said he favored a constitutional amendment requiring a balanced budget, and that reform of “entitlement programs” was necessary and inevitable.

He also said he opposed raising taxes to address the national budget deficit. He raised alarm about the effect that rolling back tax breaks on the oil industry would have on Oklahoma’s small independent oil exploration companies.

After that, I was given an opportunity to ask him a question.

I informed Cole that I know at least two petroleum geologists who are beneficiaries of the Bush tax cuts and who are not pleased that the cuts were extended in this time of national fiscal crisis.

They are particularly concerned about the effect that budget cuts are having on early childhood education and on other federal programs designed to protect kids from the adverse affects of poverty and disease.

I reminded him that children comprise 25 percent of the population in Oklahoma, that 35 percent of those children are living in abject poverty, and that a whopping 49 percent of the children in Oklahoma are living in families at the low-income level.

Then, I advised Cole that the Oklahoma petroleum geologists that I know are ready, willing and eager to make sacrifices to protect children, the disabled, the disadvantaged and elderly from the adverse effect of budget cuts.

They want to share in the sacrifices that must be made to reduce the federal budget deficit. I asked him to stop blocking them from the opportunity to shoulder their share in the sacrifices that all Americans must make to restore our nation to fiscal health.

Judging from the reaction my remarks received, around 70 percent of the attendees at the town hall meeting agreed with me.

Cole did his best to show sympathy with my concerns and allay fears that budget cuts would fall disproportionately on the young, the elderly and the disabled.

He defended the extension of the Bush tax cuts. He said the Bush tax cuts only amounted to something like $700 billion and that was not enough to make a dent in our $14 trillion national debt.

I did some checking to discern the real effect of the Bush tax cuts.

In the process, I discovered that Cole was comparing apples to oranges. The $700 billion is roughly the cost of the two-year extension of the Bush tax cuts. It reduces revenue to the government by morethan $300 billionayear, which is 20 percent of the current $1.5 trillion annual budget deficit.

Two years before the original cuts expired, morethan $2 trillion of our $14 trillion national debt was directly accountable to the Bush tax cuts.

“In 2001 and 2003, Bush signed legislation that cut taxes, much to the benefit of the affluent. The first cut was designed to help the economy after the Internet bubble collapsed. The second was to boost growth after the 2001 recession ended,” according to an article that cited Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities.

The piece said that “Kogan estimated the tax cuts have cost the Treasury $1.7 trillion in revenue to date. Of course, that may not be one bit disturbing to the taxpayers who’ve watched their tax bills go down. The only problem is, the cuts have been critical in opening up the gargantuan budget gap that Obama will face.”

It noted that “because Bush did not reduce spending, Washington has paid about $265 billion in interest on loans to cover the lost revenue. So the $1.7 trillion in tax cuts really cost around $2 trillion.”

The Bush tax cuts cost around $300 billion a year plus the interest on loans to cover lost revenue, so well over $2.6 trillion of our $14 trillion national debt is directly attributable to the Bush tax cuts – plus another $700 billion and interest on loans due to the extension of the tax cuts.

Add another $3 trillion plus interest for unpaid wars in Iraq and Afghanistan, plus another $6 trillion plus interest to bail out Wall Street and our deregulated finance industry. It becomes very clear how our nation became so burdened with debt.

Cole played a big role running up this debt. He’s a member of both the powerful House Appropriations Committee and the House Budget Committee.

I wish I had seen a little remorse on his part for the misguided leadership he and others provided that helped to get us into this debacle.

BrucePrescott is executive director of Mainstream Oklahoma Baptists, president of the Norman, Okla., chapter of Americans United for Separation of Church and State, and host of “Religious Talk” on KREF radio. He blogs at Mainstream Baptist.