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Party Polarization Menaces Efforts To Control Debt

Suddenly, it’s occurred to liberals as well as wonky budget hawks that the nation’s fiscal future is “unsustainable,” but the chances of action — short of a crisis — are near zero.

That’s because of political polarization. For years, Republicans have complained about “runaway entitlement growth,” but to sink health care reform this year, they are resorting to an old Democratic tactic — scaring seniors — to block cuts in Medicare outlays.

The same thing happened in reverse when President George W. Bush tried to reform Social Security. Democrats charged that he wanted to “privatize” the system and leave seniors victim to the vagaries of the stock market.

Bush also tried to get Democrats to form a bipartisan commission to reform entitlements, but they refused en masse because Vice President Dick Cheney opined on a TV show that he opposed raising taxes.

When Republicans were in charge of the government, they acted as if — and Cheney even said — “deficits don’t matter.”

But now that Democrats are in charge, Republicans are complaining about burgeoning deficits and trying to pin them on President Barack Obama.

The fact is that deficits do matter. If they continue piling up at their present rate, deficits will stifle growth, lower the nation’s standard of living and diminish its global standing.

Another fact is that both parties have done their part to create the fiscal mess. Both parties ought to agree to deal with it. But both find it to their advantage to simply point fingers at the other.

The Treasury Department just reported that for fiscal 2009, the federal deficit will be $1.4 trillion — 9.9 percent of gross domestic product, the highest since the end of World War II.

Once the recession ends, that percentage will fall, but there is no prospect that the budget will ever be in balance, and national debt will continue to rise.

It was 33 percent of GDP in 2001, when Bush took office. It’s 54 percent this year. The Congressional Budget Office estimates it will rise to 71 percent by the end of Obama’s first term in 2013 and to 82 percent by 2019.

For several years, a bipartisan group of budget-hawk Cassandras has been calling attention to the problem.

They include David Walker, former head of the Government Accountability Office and now president of the Peter G. Peterson Foundation, and experts at the Heritage Foundation, the Brookings Institution, the Concord Coalition and the Committee for a Responsible Federal Budget.

Late last month, they were joined by the liberal Center for American Progress, which staged an all-day program built around a paper titled, “Deal With It: A Guide to Federal Deficit and Debt.”

News stories emanating from the conference concentrated on remarks by the CAP’s president, former White House Chief of Staff John Podesta, touting a value-added tax — a national sales tax — as a means of raising new revenue to close the deficit.

As expected, Podesta’s idea was immediately attacked by conservative anti-taxers as a scheme to expand government.

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