But, of course, Congress was listening to Greenspan when he testified in 2001 that he favored tax cuts. And Republicans seized on his apparent imprimatur to do just that.
Greenspan qualified his support for tax cuts by advocating triggers to limit cuts if the fiscal landscape changed, he writes. What he didn't do was publicly criticize the way the cuts were structured, something that might have shifted the debate. Greenspan is sharply critical of President Bush and the Republican-controlled Congress in "The Age of Turbulence: Adventures in a New World." In Greenspan's words, they "swapped principle for power."
The "maestro" deserves some of the criticism that has greeted the book's
publication - it's charitable to say that Greenspan glosses over his own failings. But those criticisms miss a larger point: Once Republicans got their hands on the levers of power, they switched off fiscal discipline and left the country less prepared to meet its long-term obligations.
The White House defends its fiscal policies, saying additional spending was vital for the nation's security after the terrorist attacks of 2001. No doubt some of it was.
But was it necessary to pass a bloated 2002 farm bill, which showered subsidies on key congressional districts just before the midterm elections? Or what about the estimated $8 trillion in long-term obligations created by the new Medicare prescription drug benefit, whose price tag wasn't even known by most members of Congress when it passed in the run-up to the 2004 presidential race? And how to explain the increase of congressional earmarks from about 3,000 in 1996 to nearly 16,000 in 2005?
The bill for Social Security and Medicare is about to come due. It is a "tsunami of spending that could swamp our ship of state," David Walker, comptroller general of the United States, has said. Walker estimates that the nation's major fiscal exposure is more than $50 trillion - $440,000 for every American household. Democrats now control Congress - albeit narrowly in the Senate. They must heed the lessons of the past six years.
A return to clear-eyed fiscal planning is essential. Is anyone in Washington listening?
Reprinted from The Milwaukee Journal Sentinel.
