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"The Price of Loyalty," the book by a former Wall Street Journal reporter [Ron Suskind] draws on interviews with high-level officials who gave the author their personal accounts of meetings with the president, their notes and documents.
But the main source of the book was [former Bush Sec. of Treasury] Paul O'Neill. Correspondent Lesley Stahl reports....
"The thing that's most surprising, I think, is how emphatically, from the very first, the administration had said X during the campaign, but from the first day was often doing Y," says Suskind. "Not just saying Y, but actively moving toward the opposite of what they had said during the election."
The president had promised to cut taxes, and he did. Within six months of taking office, he pushed a trillion dollars worth of tax cuts through Congress. But O'Neill thought it should have been the end. After 9/11 and the war in Afghanistan, the budget deficit was growing. So at a meeting with the vice president after the mid-term elections in 2002, Suskind writes that O'Neill argued against a second round of tax cuts.
"Cheney, at this moment, shows his hand," says Suskind. "He says, 'You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.' O'Neill is speechless."
"It was not just about not wanting the tax cut. It was about how to use the nation's resources to improve the condition of our society," says ONeill. "And I thought the weight of working on Social Security and fundamental tax reform was a lot more important than a tax reduction."
" Did he think it was irresponsible? Well, it's for sure not what I would have done," says ONeill.
The former treasury secretary accuses Vice President Dick Cheney of not being an honest broker, but, with a handful of others, part of "a praetorian guard that encircled the president" to block out contrary views. "This is the way Dick likes it," says ONeil....
Everything came to a head for O'Neill at a November 2002 meeting at the White House of the economic team.
"It's a huge meeting. You got Dick Cheney from the, you know, secure location on the video. The President is there," says Suskind, who was given a nearly verbatim transcript by someone who attended the meeting.
He says everyone expected Mr. Bush to rubber stamp the plan under discussion: a big new tax cut. But, according to Suskind, the president was perhaps having second thoughts about cutting taxes again, and was uncharacteristically engaged.
"He asks, 'Haven't we already given money to rich people? This second tax cut's gonna do it again,'" says Suskind.
"He says, 'Didnt we already, why are we doing it again?' Now, his advisers, they say, 'Well Mr. President, the upper class, they're the entrepreneurs. That's the standard response.' And the president kind of goes, 'OK.' That's their response. And then, he comes back to it again. 'Well, shouldn't we be giving money to the middle, won't people be able to say, 'You did it once, and then you did it twice, and what was it good for?'"
But according to the transcript, White House political advisor Karl Rove jumped in.
"Karl Rove is saying to the president, a kind of mantra. 'Stick to principle. Stick to principle.' He says it over and over again," says Suskind. "Dont waver."
In the end, the president didn't. And nine days after that meeting in which O'Neill made it clear he could not publicly support another tax cut, the vice president called and asked him to resign.
With the deficit now climbing towards $400 billion, O'Neill maintains he was in the right. --60 Minutes, 01.11.04
03.12.04
Bush Economy Not As Bad As It Seems, It's Worse Than That, krugman
GOP Senate Passes $2.4 Trillion Budget, Defeats Dem Attempt To Plug Corporate Tax Loopholes, nyt
US Senate Approves Barrier To Making Bush Tax Cuts Permanent, Litvan
Bunker-buster budget raises questions, richter/lat
U.S. trade deficit mushrooms: $43.1-billion gap in January a record, Aversa
Joker-in-Chief: Bush's proposed cuts still can't get near fiscal balance, McIntyre
Bush administration ordered Medicare plan cost withheld from Congress, pugh
Lousy jobs report is ammunition to congressional Democrats, Samuel
At $6 an hour, who needs a tax cut?, vitello
It's The Economic Team, Stupid, Kusnet
Americans Have Lost Faith In A Bush Economic Recovery. Pew Poll Suggests 69%, Dionne
Economy: The Six Month Wait, Sirota+Harvey+Legum
Bush at odds with world consensus on globalization, stiglitz
Investors Appear Doubtful Of Bush Economic Promises As Stock Market Continues Slide, nyt
In politics, it's still the economy, stupid, Little
Is Jobless Recovery Now the Norm?, Lee
US Jobs Created Look Poor In Both Quality And Quantity, Swann
Bush breaks trade deficit records, afp
Why Bush Supports Outsourcing, MoveOn
Debt collecting going overseas along with consumers' personal financial data, Lazarus
The Social Security CrisisSolved!, Gosss
Greenspan's got his Eye on your Retirement -- for all the Wrong Reasons, Baker
President's Unfunded Mandates Criticized by State Govts., Broder
In Rebuff to Bush, Senate Votes for Tax-Cut Barriers , Weisman
GOP versus Bush budgets, Editorial
The Collapse of Capitalism as We Know It, Ibrahim
Bush Is Clearly Lying About The Difference Between Self And Dems On Tax Cuts, wp ed
Bush Want To Increase Our Deficit With More Tax Cuts To The Rich, nyt
Bush budget would produce $2.75 trillion deficits over decade, ap
Congress Budget Office Says Bush Will Not Cut Deficit In Half, As Promised, wp
Economy: 'Dishonest' Would Be An Understatement, Sirota+Harvey+Legum
Compassionate George Refuses to Extend Unemployment Benefits, Bivens
Tax Cuts Threaten Social Security, CAP
Bush Budget: Deep, Widespread Cuts In Domestic Programs Because Of Tax Cut Deficit, Press Release
Greenspan's Comments Should Ignite Debate on Social Security, lat
Greenspan Is Right, Now IS Time to Act on Social Security, Hodges
Greenspan: the class warrior, Sirota+Harvey+Legum
Greenspan, Bush and Social Securiity: Robin Hoods in Reverse, Rosenberg
Alan Greenspan Has Got to Go, Rothschild
O'Neill Says Cheney Told Him, `Deficits Don't Matter' , tns
Our Economy Is The Sign Of The Beginning Of Our End, gross
Once Again, Bush Floats Vague Free-Trade Rhetoric, In Time For Mexico Visit, nyt ed
The Decline and Fall of the American Job , sorensen
Do citizens really want these jobs? ,
Wood
Economy: Feeling The Squeeze, Sirota+Harvey+Legum
01.12.04
Bush Told Treasury Sec. was told "'deficits don't matter' when he warned of a looming fiscal crisis." , reuters
International Monetary Fund Warns Bush About His "Reckless Fiscal Policies",ed
Global Economy at Risk by U.S. Deficit , ed
Bush Tax Cut Guru Sees DEMs As "Cornered Rat," Runs GOP Meetings And Plans Expansion Of Authority,
Business Thinks Bush Immigration Plan Is Good For Them, Labor Worries,nyt
Bush Sec. Of Labor Guesstimates Under The Table Jobs, Ignores "Labor Underutilization," Which Would Add 4.2% To Unemployed Statistic,nyt
Economy: 01.11.04
Bush Is Shifting Economic Risk From Corporations To Individuals ,hacker
Ex-Treasury Chief Takes Aim at Bush in New Book , crutsinger, ap
Bush Savaged By Former Treasury Chief, Beattie
U.S. Job Growth Virtually Zero in December , walsh
Few Jobs Made in USA as 309,000 Stop Looking for Work , oneal
Feeble growth in US jobs market,
BBC
Tepid Economy Seen in Weak Jobs Data , glain
Canada's job growth soars past U.S. , little
Economy:01.09.04
Jobless Rate Goes Down Because More People Have Given Up Finding Work ,wp
Lost Your Job Because Of NAFTA? You're Just Not Part Of The Big Picture ,ed
Free Trade Would Work If The BushAdmin Did More To Help Amnericans Being Screwed ,kinsley
Weak dollar's impact on Wall Street,
consumers , Scherer
The Economy: 01.08.04
Economists Sound Loud Alarm: Bush Deficit A Threat To World Economy ,nyt
This Business Cycle Could Get Vicious , kuttner
Where's Bush Buddy Lay? "Fraud" Fastow Will Squeal On Enron's CAO For Legal Brownie Points ,nyt
"Deficit" Bush Cuts Poor, Kids, Vets, Elderly For Tax Cuts To Rich, But DEMS Fear Voters If They Complain ,nyt
With NYC In The Red, GOP Mayor Will Spend $250 Million On Tax Cuts, Get Back Lost Votes ,nyt
Services Sector Growth Slows; Factory Orders Stumble In November, Agencies
Treasury chief says he's sure of cutting Bush deficit
in half in five years. Wants More Tax Cuts., AP
The Economy: 01.07.04
US economy is roaring, but its success is ill-founded, potentially bad news, keegan
The Dark Side Of Bush's Hydrogen Economy, Baard
Fed Should Have Acted Against Stock Market Bubble , weisbrot
Former Treasury Sec. Really Gets Worried , krugman
Dollar Stumbles To New Record Low Vs Euro, Pawlak
Dollar Down, Euro Up , Khan
Bush Budget Shoves It To Poor, Vets, Workers, Rothschild
How the War Machine is Driving the U.S. Economy , gumbel
U.S. tells employers how to skirt proposed
OT rules , AP
Bush Wants To Con The People For 10 More Months, Then Get Them To Vote For His Economic Time Bomb ,dionne
The federal budget is drifting into a future of unprecedented tax increases, huge deficits or both....There's already a clear bipartisan policy concerning the future: Forget about it. ,samuelson
The Economy: 01.06.04
Bush Wants To Con The People For 10 More Months, Then Get Them To Vote For His Economic Time Bomb ,dionne
Now Even Cool-Headed Former Treasury Sec. Warning Bush Economic Catastrophe On the Way ,krugman
Bush-Rove Tax Guru Likens Taxing The Rich To Hitler Killing The Jews ,cohen
Dollar sags to new record low ,bbc
Greenspan's folly: No end in sight to dollar's descent , denny
China, Japan Stave Off Bush Export Attack By Pegging Their Currency To The Falling Dollar ,ignatius
U.S.-Canada dollar dance continues ,ingram
US Consumers in Dangerous Levels of Debt ,Tompor
Bush's Fiscal Mismanagement
But it's actually far worse than it looks when you put it in historical perspective. Many people know that you have to adjust annual deficits for inflation to compare deficits year to year, which might seem to make Dubya's deficits bad but not outlandish (at least not compared to his Dad). But you also have to recognize that inflation also effects the total value of the debt, not just the deficits. Inflation cuts the real amount owed by the federal government on past borrowing, which means that in times of high inflation, even large real deficits are offset by real cuts in the total value of the debt. Conversely, running deficits in times of very low inflation means that the real cost of the debt escalates much faster.
Which is what Bush is doing right now.
What this means is that when you look at the history of the public debt, the United States had a large increase in federal debt to pay for World War II, then basically did not increase public debt significantly until the 1980s. Let me repeat-- in real terms, public debt did not significantly increase from the end of World War II until the beginning of the 1980s.
Under Reagan and Bush Senior, real debt exploded for the first time since World War II. Clinton's administration saw the most significant decrease in public debt in the whole post-war period.
As this chart shows, the US by 2000 was just beginning to recover from the irresponsible binge in public borrowing that Reagan and Bush Senior had engaged in.
I don't have a graph with the real increases in debt due to Dubya's tax giveaways to the wealthy, but with almost zero inflation, it's an almost pure billion for billion increase in real debt. --Nathan Newman, June 19, 2003
WHO WILL PAY FOR BUSH'S WAR? The Bush deficit of $304 billion, the largest in history as well as the most precipitous, (see above) is pre-budget. With the new Bush budget in place, our deficit is $5.4 trillion over ten years. (Bush is back-loading the deficit so the entire economic penality of what he is doing will not be readily apparent until after he is out of office.) Paul Krugman suggests that we count on that post-budget deficit to increase by around $140 billion evey six months, and that's based upon past behavior and does not count the Bush war against Iraq: "Independent analysts, who take into account the stuff the administration pretends doesn't exist — the war, the alternative minimum tax, and so on — think we're looking at deficits of 3 or 4 percent of G.D.P., maybe more, for the next decade. And then it will get much worse." We know that a deficit such as that which is predicted could move our country into a depression in ten or so years. But as Bush said as he was leaving Texas for D.C. when told that the state was moving into deficit spending due to his ill-advised tax cuts, "That's not my problem." To see how bad it could get, let's look at a NYT estimate of the cost of a Bush war on Iraq.
Military Deployment = $79 billion
The Bush budget implies a deficit of $5.4 trillion by the end of ten years, but the addition of a Bush Iraq war deficit of .7 trillion will push it up to $6.1 trillion, and assuming Bush will continue his ill-advised economic plans with a GOP Congress in place, the projected 2013 deficit by the end of his present term in office will reach $6.7 trillion. Bush plans to plunder the taxpayers' money coming in to support Medicaid, Medicare, and Social Security to bring down the deficit to $3.2 trillion, but pretty much eliminating the three programs by so doing, which is his ultimate goal, thereby destroying the key economic safety nets nearly all of the poor and most of the middle class have. By then, the government will have to delete 30% of its social programs or put heavy taxation in place to avoid doing so. Given the huge deficit we will still have at that point, "the temptation to print money to pay our debts will become almost irresistible." That being the case, inflation will set in, jobs will be lost, and wages will remain fixed as prices go up. By then, of course, ex-President Bush will be saying, "That's not my problem." It will be ours. --Politex, 02.15.03
Bush Lies And Wins, You Lose But the White House and its allies tenaciously pursued a dividend plan more to Bush's liking. It was added to the Senate bill by the narrowest margins last night, when Vice President Cheney cast the tie-breaking vote for a final 51 to 50 tally. Democrats mocked the vote, saying Cheney had in effect given himself a $107,000 tax break on his own dividend income....Sen. Olympia J. Snowe (R-Maine) -- had insisted that the tax bill's total cost not exceed $350 billion through 2013. Snowe opposed the new dividend plan, calling it a gimmick to mask the overall bill's true cost, because advocates acknowledge they have no intention of allowing the tax cut to expire in 2007.... Critics say the Senate bill is now $350 billion in name only, because the dividend plan, along with a major small-business tax cut and other provisions will never be allowed to expire, as the bill calls for. If those measures were extended until 2013, the bill's true cost would far exceed $660 billion, and could reach Bush's original $726 billion request, according to the Center on Budget and Policy Priorities. "It is a measure of how far fiscal discipline has slipped that the Senate would even consider such hocus-pocus in the wake of the Enron accounting scandal," said Robert Bixby, executive director of the Concord Coalition, a budget watchdog group. --Washington Post, 05.16.03
The Bush deficit of $304 billion, the largest in history as well as the most precipitous, (see above graph) is pre-budget. With the new Bush budget in place, our deficit is $5.4 trillion over ten years. (Bush is back-loading the deficit so the entire economic penality of what he is doing will not be readily apparent until after he is out of office.) Paul Krugman suggests that we count on that post-budget deficit to increase by around $140 billion evey six months, and that's based upon past behavior and does not count the Bush war against Iraq: "Independent analysts, who take into account the stuff the administration pretends doesn't exist — the war, the alternative minimum tax, and so on — think we're looking at deficits of 3 or 4 percent of G.D.P., maybe more, for the next decade. And then it will get much worse." We know that a deficit such as that which is predicted could move our country into a depression in ten or so years. But as Bush said as he was leaving Texas for D.C. when told that the state was moving into deficit spending due to his ill-advised tax cuts, "That's not my problem." Note: This was written in February (see above), prior to any discussion of the new round of Bush tax cuts, so please add $.7 trillion in deficits to the previously-stated $6.7 trillion, adding up to a grand total of $7.4 trillion in deficits in ten years, all created by Bush to date. This does not include the added deficit spending based upon the new tax cut Bush has said he will propose next year, prior to the presidential election, according to a recent story in the Washington Post, nor does it include servicing of the debt, which will continue to grow each year as the deficit continues to increase. --Politex, 05.16.03 (more)
Military Occupation = $105 billion (First 5 years only.)
Humanitarian Aid = $10 billion
Governance = $12 billion
Reconsrtuction/Recovery = $105 billion
Debt/Claims/Reparation = $361 billion
Aid To Allies = $10 billion (Does not include quid pro quo deals)
TOTAL: $682 billion
The Senate...narrowly approved a $350 billion tax cut...The final bill passed 51 to 49, with three Democrats voting for it and three Republicans opposed... The Senate bill actually is more generous to corporations and investors than either the House-approved tax cut package or the president's original proposal...Investors who own shares in corporations that pay little or no federal taxes would pay no taxes at the corporate or individual level. "This kind of gives the lie to the argument that what this is all about is eliminating the double taxation of dividends," said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities....Senate Minority Leader Thomas A. Daschle (S.D.) said: "It's a starkly elitist tax break. The fortunate few will be able to shelter all their investment income, while working Americans will continue to pay taxes and shoulder the obligations of our nation."...
Bush's "Little-Bitty" Deficit Lie
Just over the next two years, 2003 and 2004, the cost of President Bush's enacted and proposed tax cuts would be three times as great as the cost of all of the following combined:
* All military operations since Sept. 11, 2001, in Iraq and Afghanistan;
* All planned reconstruction work in Iraq and Afghanistan;
* All new homeland security spending since Sept. 11;
* The costs of rebuilding at Ground Zero and the Pentagon, compensating victims' families and subsidizing the airlines after Sept. 11.
President Bush is telling Americans we have gone from monster surpluses to monster deficits because of war and recession. It's not true. As the Center on Budget and Policy Priorities demonstrates in a withering and succinct analysis, the cement shoes dragging us down into that sea of red are the President's revolutionary, radical tax cuts.
In Canton, Ohio, last week, the President even complained that the Senate wants to scale back his latest proposal for tax cuts to $350 billion -- an enormous sum, but one George Bush derided as "a little bitty tax relief package." Three hundred and fifty billion dollars! That alone is far more than the $200 billion provided or requested for post-911 foreign wars, homeland security efforts and reconstruction work. "It is difficult to square the claim that the costs of the war have been so large that they have caused the return of deficits," drily notes CBPP, "with the argument that the $350 billion for tax cuts is a 'little bitty' amount." --Matt Bivens, 05.14.03
The effort to turn Iraq into a democracy...is making the U.S. less of one. Our opposition party has disappeared, corporate interests dictate public policy, and the feds may be rummaging through your e-mail. There's a dirty secret no one has told you, and here it is: This war is not about changing Iraq, it's about changing America. --Steve Lopez
"You can't distribute medicine in Basra while making it unaffordable in Baltimore. Only a nation that feels secure at home will string a safety net abroad, which is why the economics of the Bush administration spell a grim future for both America and Iraq." --Harold Meyerson
THE BUSH ADMINISTRATION IS nothing other than the quintessential political expression of [a] social dung heap. Its vice president, Mr. Richard Cheney, divides his time between presiding over a secret government and working as a bag man for Halliburton, which continues to pay him more than a half million dollars a year. The secretary of the Army, Mr. Tom White, is a former high executive of Enron. Mr. Richard Perle, who has shaped administration policy on Iraq, holds secret business meetings with the arms merchant Khashoggi. As for the president himself, the elevation of this utter nobody—whose most notable characteristic is his personal sadism—will be seen by historians as the expression of the moral and intellectual degradation of the American ruling class. A class that could choose Mr. Bush as its leader is one that has, figuratively and literally, lost its head.
There is still, despite everything, a real world. Beneath the glitz and glitter, the crisis of American capitalism is assuming gigantic proportions....The massive diversion of resources to fund tax cuts for the wealthiest section of the population threatens national insolvency....A staggering percentage of the nation’s wealth is in the hands of the wealthiest two percent of the population. A study by Kevin Phillips established that the annual income of the richest 14,000 families is greater than the annual income of the poorest 20,000,000 families. --WSWS, 03.26.03
Let's be clear about the Senate Dems' successful vote to trim Bush's new tax cut plan from $739 billion down to $350 billion in the face of Bush's request for $75 billion to pay for the first six months of the war. By the time it gets out of the Repug House-Senate committee whose job is to iron out differences between the two houses of Congress, the new Bush tax cuts will be back up to $739 billion or close to it. And then the Senate will vote for it and defeat the Dems. That's because two of the Repugs who voted with the Dems on a 51-48 vote, Voinovich and Snow, have gone on record as saying they will support whatever comes out of committee. In Washington, that's called "politics." Anywhere else, that would be called "hypocrisy." --Politex, 03.26.03
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