Which presidents signed the legislation that has played the biggest role in ballooning the public debt of the United States to $31 trillion? The answer, from a 2021 study, may surprise you.
President Biden has increased the debt by $3 trillion in a little over two years. He has pointed a finger at his predecessor, Donald Trump, under whom the debt rose $7.8 trillion in just four years.
When Trump was president, he blamed Barack Obama for running up the debt. Obama, in turn, blamed George W. Bush. And so on.
There’s no doubt that the debt has grown immensely under the last four presidents, and to a lesser degree before them. However, the Fab Four each had to deal with unforeseen problems: The coronavirus for Biden and Trump, the Great Recession for Obama and two wars for Bush.
But if the question is: Which presidents had the most impact on America’s “fiscal imbalance” over the long term, meaning the inability or unwillingness to collect enough money for programs and services that have been promised, that 2021 study reports that the answer is ... Lyndon B. Johnson and Richard Nixon.
The study is by Charles Blahous, who was an economic adviser to George W. Bush and then a public trustee for Social Security and Medicare. The Washington Post reported that Blahous went through years of congressional and executive budget documents to assign LBJ a 29.7% share of today’s fiscal imbalance. Nixon was right behind him, at 29.2%.
The important point of Blahous’ work is that nearly 60% of the government’s budgeting problems is because of policy choices made more than 50 years ago, when there was no way to predict with confidence how much things would cost today.
Here’s one expensive example: To ensure passage of Medicaid, providing health care for the poor, nursing home coverage was included in what was seen at the time as a “seemingly minor provision.” But the Post said it led to “a gusher of cash from the federal government that helped build what is now a $150-billion nursing-home industry; one-third of Medicaid personal-health spending goes to nursing homes.”
A similar problem occurred with the Medicare bill, when LBJ agreed to pay hospitals above the cost of care and “reasonable” fees to doctors. This ultimately led to today’s continued cutbacks in reimbursements, while Medicare spending keeps increasing.
“Johnson enacted Medicare and Medicaid in the mid-1960s, and then Nixon in the early 1970s expanded both programs and also enhanced Social Security so that benefits were indexed to inflation,” the Post reported. “Social Security and Medicare are now so popular that both Biden and Republicans have pledged not to touch them as they haggle over other types of government spending.”
The story also explores the impact of tax cuts signed by Trump, Obama and Bush on the country’s finances. The effect of those cuts are miniscule compared to the choices about large spending programs over a longer period.
All this should not ignore the positive elements of Social Security, Medicare and Medicaid. These programs have helped many Americans. But there is no political will to require the beneficiaries of these programs to put enough money into them to fully pay their expenses.
The current budget haggling will be solved in some way, but both parties have taken the biggest part of the financial problem off the table. Until elected officials get serious about solutions to benefit programs, we can expect our debt to keep increasing. History proves this.
Jack Ryan, Enterprise-Journal
