03/22/2011 04:20 pm ET | Updated May 25, 2011

Budget Reality Part 1: The Bush Tax Cuts

Neither party is serious about reducing the annual federal budget deficits, or the national debt.

People who do budgets usually focus on the big ticket problems. We don't cut out the peanut butter when we want to buy a new car: we focus on things which can make a difference. Both Republicans and Democrats are fighting over the peanut butter, and hoping that we won't notice that it all is a sham. Let's look at what created the problem, and ways to deal directly with the causes.

The Bush tax cuts have not paid for themselves, as many Republicans seem to believe: they have added 3-4 trillion to the national debt in the last decade. That's a big number. Using projections of surpluses over the next ten years, Bush thundered, "It's the people's money," and we should give it back to them. Unfortunately for the people, the projections proved wrong, and the vision of a surplus vanished. No income to give back. Thus, the trillions added to the national debt.

Tax cuts are spending: they give money away that otherwise would be income for the government. Covering this 400 billion annual deficit means either raising taxes, cutting the budget by more than 400 billion a year, or a combination of the two. Even this number would barely break even for the future, not even reducing the national debt. Is anyone proposing reducing the federal budget by 400 billion a year? If not, the Bush tax cuts will continue to add to the national debt.

This is not about left or right. It is about paying our way instead of passing huge debts on to our children. It is about economic health instead of weakness. It is about responsibility instead of selfishness. It is about getting control of deficits and reducing the national debt. It is about dealing with reality, instead of rhetoric.

Two steps right now: first, if we are to be fiscally responsible, we have to take a pledge to introduce no new tax cuts, tax breaks, or tax incentives, unless fully paid for by budget cuts or new income.

Second, we have to phase out the Bush tax cuts: dropping 20% of the cuts a year over five years would ease the impact on the economy, even while adding perhaps a trillion to the debt over this period. After five years, and assuming a recovered economy, this income would substantially reduce the national debt.

Tomorrow, the military budget...