A visit to Senator Rob Portman’s website reveals the typical inoffensive slogans: spending is out of control, the deficit is unsustainable and taxation is sapping growth. But a new report released yesterday by Innovation Ohio reveals that during his tenure at the helm of the Office of Budget and Management, Portman exhibited an alarming pattern of fiscal irresponsibility and partisan gamesmanship.
While at the OMB, Portman was responsible for constructing the Bush administration’s 2008 Federal Budget. At the end of FY 2007, the year before Portman assumed control of the budget, the federal deficit was $160.7 billion. One year later, it had ballooned to a whopping $458.5 billion. How did this happen, you might ask? That perennial Republican addiction: don’t tax, and spend.
As the report notes, to some degree all budget deficits are due to revenues being lower than outlays – and the figures for Portman’s budget are truly staggering. Predictably, revenue declined under the 2008 budget by 1.7%, on the back of tax cuts to personal and corporate income and slower than expected growth. Far more alarming, though, was the massive surge in spending – up 9.3% from the previous year.
The massive discrepancy in revenues and outlays was due in large part to spectacularly inaccurate economic forecasting. The report documents testimony given by then-director Portman to the House Committee on the Budget, in which he assured representatives that revenue growth would average 5.4 percent through 2012. In reality, fiscal year 2008 saw revenue decline by 1.7%.
And if you thought the mortgage crisis might have avoided Portman’s discerning eye, you would be right. When questioned about mounting subprime foreclosures in the summer of 2007, Portman said he had “a hard time imagining that that would have a real-world impact on our economy that would affect this [budget] projection.”
Three months prior, in a speech to National Community Reinvestment Coalition, Hilary Clinton had warned that the “alarm bell about the subprime home market has largely gone unnoticed by the (Bush) administration because they keep arguing we have to give trillions of dollars of tax cuts for the wealthy.” The writing was on the wall.
Even in a more hospitable economic climate, the 2008 budget was destined to fail. In perhaps his most brazen display of inside-out conservative logic, Portman proposed to extend the 2001 and 2003 Bush tax cuts which the Economic Policy Institute estimated would add $1 trillion to the national debt over 10 years. Meanwhile he proposed cutting 141 entitlement programs to needy families, having the gall to add that the cuts would save $12 billion over the fiscal year.
Let’s do the math: $100 billion in Bush tax cuts per year, over ten years, minus $12 billion in FY 2008, puts us at only nine hundred eighty-eight billion dollars added to the national debt. If this weren’t bad enough, Portman’s spending controls failed, resulting in a 5.8 percent rise in nondefense discretionary spending.
Fiscal responsibility indeed.