The causes, potential outcomes of, and possible solutions to the growing U.S. public debt ($10 trillion and counting).
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00:55Tonight on Frontline.
00:59My budget reflects the stark reality
01:01of what we've inherited.
01:03A trillion-dollar deficit,
01:04a financial crisis,
01:05and a costly recession.
01:07Government spending may jumpstart the economy.
01:10We as a country have been living
01:12well beyond our means.
01:13But does America already owe too much?
01:16The national debt is now over $11 trillion.
01:20The U.S. is on an unsustainable path.
01:22And are we running out of time?
01:24We have obligations which exceed
01:26the net worth of the American public.
01:28How could we dig ourselves into such a hole?
01:32Tonight on Frontline,
01:33correspondent Forrest Sawyer
01:35takes us inside the politics,
01:37the history,
01:38and the hard reality
01:39of the national debt.
01:41We've lost things on the map.
01:43Tonight on Frontline,
01:46the ally of the massive state,
01:48theysztof buddy of the city,
01:48it is not going to do such a harm.
01:49Six years later,
01:51it is the loss of the world.
01:54It is all made for me,
01:56but it is all made for me.
01:58Remember,
02:01we haveお願い,
02:02so wait,
02:03there is no way
02:04to come up to Christ.
02:05And the way
02:06is to bring
02:07the history,
02:08and the Midnight
02:09January 20th, 2009, seems like a long time ago.
02:21The crowd stretched from the Capitol to beyond the Washington Monument,
02:26the biggest gathering in the history of Washington, D.C.
02:33Everyone there, and all of us watching the inauguration around the country,
02:37knew that the American economy was in trouble.
02:41And we were hoping that Barack Obama would find a way to lead us out of it.
02:47That we are in the midst of crisis is now well understood.
02:52Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some,
02:58but also our collective failure to make hard choices and prepare the nation for a new age.
03:04Homes have been lost, jobs shed, businesses shuttered.
03:10It was clear to anyone listening that day that the task before Barack Obama was daunting.
03:17He inherits a situation so bad that you have to ask, why would anyone want to be president now?
03:22Well, we have a financial system that is frozen, no credit.
03:35The unemployment rate is likely to hit double digits by the end of this year,
03:41a rate we haven't seen since 1982, but it's really the worst picture since World War II.
03:46Today, I say to you that the challenges we face are real.
03:50They are serious and they are many.
03:52He's got not only the challenge of the economy, he has a real political challenge
03:56in that people have lost confidence in Washington's ability to deal with some of this.
04:03We're in a mess.
04:05And he has to sort of pull these pieces together.
04:08And he has to pull these pieces together, you know, with remarkable speed.
04:17For everywhere we look, there is work to be done.
04:20The state of our economy calls for action, bold and swift.
04:24Even before Obama took office,
04:26the government had committed hundreds of billions of dollars to shore up the economy.
04:30We will build the roads and bridges, the electric grids.
04:33And Barack Obama spoke as if he was committed to spending even more.
04:38We will harness the sun and the winds and the soil to fuel our cars and run our factories.
04:43But for the president and the country, there is one unavoidable question.
04:48Where are we going to get the money to pay for all this?
04:51All this we can do.
04:53All this we will do.
04:55The answer lies here, in a room at an undisclosed location not far from the Capitol steps.
05:01This is where the U.S. government gets money it needs to pay its bills.
05:07It borrows it.
05:09And consistent with recent four-week bill auctions,
05:11contacts have cited broad demand across the block of our tip four percent.
05:14On this day, the government was auctioning $67 billion of debt obligations,
05:20treasury securities that pay interest guaranteed by the full faith and credit of the United States.
05:26Are there any questions or comments?
05:28No, thanks. Nothing here.
05:29A government, like a household, has expenses and then they have income.
05:34And when those expenses exceed the income, each year they run a deficit.
05:39If you have a deficit this year and then a deficit next year, those deficits start to add up.
05:44And that's what we call the debt.
05:46So the debt is the sum total of all the deficits we've accumulated since the revolution.
05:51And it's a lot of money.
05:52It's a lot of money, yes.
05:54A lot of it is now owned by foreigners, by the Saudis, by the Chinese, by the Japanese.
05:58They lend us money because the government does not take in enough in taxes to pay for the services it provides.
06:07Americans like low taxes.
06:09That's just the reality, that we want it all.
06:12We want our tax cuts and we want them to be big.
06:15We want new spending programs.
06:16We want every person cared for.
06:18We want government investment.
06:19But we don't want to pay for it.
06:21Even before this crisis, America was deeply in debt.
06:26The debt on Inauguration Day was over $10 trillion, nearly $35,000 for every man, woman, and child in this country.
06:36Without borrowed money, the federal government would grind to a halt.
06:39We are living on the kindness of strangers, as it were, because, frankly, there aren't enough savings in this country to finance those deficits.
06:48How bad could it be if we do nothing?
06:51Well, first of all, you might have a situation where there is one day when the government says we need to sell several billion dollars of bonds and nobody shows up.
07:00No money to pay the Social Security checks.
07:02No money to give to the states for their Medicaid programs.
07:05Cut, cut, cut, cut, cut.
07:07Let's imagine a scenario where the politicians would love to keep the government going, but they can't, because there's nobody to lend us the money.
07:14Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans.
07:23But the president knows that his vision and the country's future cannot continue to be sustained by borrowing money.
07:31The status quo is not going to work.
07:33Anybody who thinks about that realizes the U.S. government cannot go on every year borrowing more money than it did the year before,
07:41and the U.S. economy cannot rely on ever-increasing amounts of borrowing from other countries, China, Japan, and Europe.
07:49The American standard of living is really going to be at risk, because we can't continue to essentially borrow from the Chinese to fund the lifestyle and consumption that we think we want to have in the U.S.
08:01We have to find a way to actually live on what we earn.
08:06There seems to be this huge contradiction.
08:07On the one hand, we have this looming national debt, which looks like a tsunami washing over us if we don't do something soon.
08:16And on the other hand, we've got this immediate problem, and the government has to spend like crazy.
08:22And they are running into each other.
08:24Those two things are totally at odds, but that's the paradox of the situation that we're in now,
08:29which is government has got to run big deficits to stimulate the economy.
08:33We're going to have to run deficits at sizes that would have been unthinkable, really historic, for a couple of years,
08:41because government's the only entity with the wherewithal to prop up demand in the economy
08:47when businesses and consumers are all pulling back.
08:52Not since the Great Depression have Americans watched the passage of power from one president to the next
08:58with such a mixture of concern and hope.
09:03For President Obama, our economic troubles are now his burden.
09:08So much depends on the decisions he must make.
09:13For former President Bush, he leaves office with his own burden,
09:17a legacy of the country and the economy in crisis.
09:25Eight years ago, the passage of power to George Bush could not have been more different.
09:30He was the first president in 30 years to assume office with a budget surplus.
09:36President Bill Clinton had forged agreements with Congress that turned large deficits into growing surpluses.
09:42In 2001, we not only had our fourth year of consecutive surpluses,
09:48but we were looking at surpluses as far as the eye can see.
09:52The centerpiece of George Bush's economic agenda was cutting taxes.
09:58Enough is enough, folks.
10:00It's time to give our folks some tax relief in America.
10:03The president was committed to returning some of the budget surplus he had inherited
10:08back to the American people in the form of a tax cut.
10:12We always have got to remember whose money it is we're talking about.
10:17It's not the government's money.
10:19It's the people's money.
10:20When the new administration took over, they had this substantial surplus.
10:28They decided that it should be turned back to the people,
10:33and they had campaigned on that with a very substantial tax cut.
10:39Too big, in my opinion, but a sort of plausible thing to do at the time.
10:45After only three months in office, President Bush signed a sweeping tax bill
10:51that was projected over ten years to cut taxes by nearly $1.3 trillion.
10:58He pushed through his first major initiative, this very large tax cut over a trillion dollars,
11:05which was going to go disproportionately to the wealthy.
11:09And I think that in that tax cut, we began to see a few of the signs
11:15of what Bush's economic legacy would be.
11:17You are really critical of President Bush, aren't you?
11:20I am.
11:21At heart, why?
11:23Because I think that time and again, he put politics ahead of economics,
11:27is that if there was a politically smart way of doing something
11:30and an economically smart way of doing something,
11:31he always chose the politically smart way.
11:33Tax cutting has been the politically smart way for Republicans
11:38ever since Ronald Reagan established the modern Republican brand
11:42when he pushed through the largest tax cut since World War II.
11:46Republicans proclaimed themselves the party of small government and tax cuts.
11:51But Ronald Reagan was also an economic realist.
11:55You know, Reagan cut taxes in the first big year of his term in 1981
11:58and then came back, and people forget he had enormous tax increases
12:02once it was clear the deficits were spiraling out of control.
12:05Realizing that his tax cut had been too large,
12:08and with the deficit rising,
12:09Reagan agreed to effectively scale back his tax cut.
12:13He signed one of the largest peacetime tax increases since the Depression.
12:21Tax hikes would never be part of George W. Bush's agenda,
12:25perhaps because his political instincts were honed at the side of his father,
12:29George Herbert Walker Bush.
12:35While running for office,
12:37candidate Bush uttered words that would haunt his presidency.
12:41Congress will push me to raise taxes, and I'll say no,
12:45and they'll push, and I'll say no,
12:47and they'll push again, and I'll say to them,
12:51read my lips.
12:54No new taxes.
12:56With that phrase,
13:00President Bush sealed his political fate.
13:06In office less than two years,
13:08he was confronting a stubborn recession
13:10and a steadily escalating budget deficit.
13:19He called for a tax increase
13:21to cut the deficit
13:22and trim the national debt.
13:24These are the times that try men's souls.
13:28There's a cancer
13:29gnawing away at our nation's health.
13:33That cancer is the budget deficit.
13:36Year after year,
13:37it mortgages the future of our children.
13:39Read my lips.
13:40No new taxes.
13:42I believed him.
13:44I thought that was a firm pledge with the American people.
13:46It's time to end the talk about the deficit.
13:49Instead, he decided to go sign a tax increase.
13:52And it's time,
13:53I think past time,
13:55to put the interest of the country first.
13:58That violated every aspect of the conservative movement.
14:00I thought it was what distinguished
14:02the Reagan Republicans
14:03from the old-fashioned traditional Republicans.
14:08George Bush lost his bid for re-election to Bill Clinton.
14:11I just called Governor Clinton over in Little Rock
14:15and offered my congratulations.
14:18George W. Bush was at his father's side
14:20when he conceded defeat
14:22in the 1992 presidential election.
14:26The lesson for the son was clear.
14:29A modern Republican is a tax cutter.
14:31Mr. Speaker,
14:32the President of the United States.
14:34His son comes to office saying,
14:40what's the point in fiscal discipline?
14:43The voters never reward you for it.
14:44So the second President Bush
14:46treated fiscal discipline
14:47as if it was some sort of quaint anachronism,
14:51something that his father's generation
14:52had to worry about,
14:53and he didn't.
14:55He took too strongly to heart
14:58the lesson he saw of his father's failure,
15:00which is you don't anger the base of the party.
15:04The very conservative, anti-tax base of the party.
15:09And the problem with that calculation is,
15:12you know, stuff happens.
15:19Eight months after President Bush was inaugurated,
15:22planes crashed into the World Trade Center,
15:25the Pentagon,
15:26and a field in Pennsylvania.
15:29Dow Jones Industrial Average down 14%.
15:32Heading into war and recession.
15:34It's a shell-shocked economy.
15:359-11 threatened the economic fortunes of the country.
15:38It fell sharply last quarter.
15:39Fracturing 15,000 jobs last month.
15:42For many, it called into question
15:43the wisdom of Bush's tax cut.
15:45But his party was solidly behind him.
15:48Now, way back in 2000,
15:50there were surpluses projected.
15:52And that had come after some good luck
15:55with the economy and some hard work.
15:57And then came along this massive tax cut.
16:00Was that, in retrospect, a mistake?
16:02No, absolutely not.
16:04The surpluses that were projected
16:05weren't lost because of the tax cut.
16:09They were lost because of 9-11
16:10and the effect that that had on the economy.
16:14And you've got to remember,
16:159-11 was a cataclysmic event for our nation.
16:18And it readjusted our nation a lot of ways.
16:23But one of the ways it caused us to have to readjust
16:25was that we went into a very severe economic slide.
16:28At a time of economic uncertainty,
16:31the president was declaring a war on terror.
16:33On my orders,
16:35the United States military has begun strikes
16:37against al-Qaeda terrorist training camps
16:40and military installations of the Taliban regime in Afghanistan.
16:45Wars are expensive.
16:48Bush knew at the time
16:49that we had long-term economic challenges in this country.
16:52And he continued to promise more tax cuts and more goodies
16:54long past the point when we knew
16:56that the budget surpluses were gone
16:58and we had deficits as far as the eye could see.
16:59Assistant to the president for economic policy
17:03in Bush's second term, Alan Hubbard,
17:05suggests another rationale
17:07behind President Bush's spending and tax-cutting philosophy.
17:10The only way to control spending,
17:12and I truly believe this,
17:14the only way to control spending
17:16is that you've got to minimize taxes.
17:21Because if you minimize taxes,
17:22they know the deficit can't be too big.
17:25And that's what keeps pressure on them
17:27to reduce spending.
17:28It's known in Washington
17:30as the starve-the-beast theory.
17:33Reconsiderers laid upon the table.
17:35Government won't grow
17:36if there is no money to pay for it to keep growing.
17:39Starve-the-beast has been the Republican strategy
17:41really since Ronald Reagan.
17:43If you keep cutting taxes,
17:44that will put pressure on the system to cut spending.
17:46Now, the irony of that is
17:48no one really likes to cut spending,
17:50Republicans or Democrats,
17:52mostly because the major government programs,
17:54Social Security, Medicare,
17:55military, civil service pensions, defense,
17:58those are all popular, broadly supported programs.
18:01But if you're going to reduce the amount of money
18:03that they take in,
18:04doesn't that mean you can't spend like a drunken sailor?
18:08It does.
18:09But the Republicans like the tax-cut part of that argument.
18:12They don't like the spending-cut part of that argument
18:15because it turns out it's politically unpopular
18:17to actually cut or even slow the growth
18:20of a lot of these major popular programs.
18:24All in favor, say aye.
18:25Aye.
18:26Opposed, no.
18:27The ayes have it.
18:28The starve-the-beast notion
18:29as an empirical, practical thing,
18:31it's not true.
18:32It turns out that you can cut revenues
18:34and keep spending
18:35because the government seems to be able to borrow
18:37endless amounts of money.
18:39And the government was now borrowing
18:41at an accelerated rate.
18:43But nothing seemed to shake
18:45the president's belief in tax cuts.
18:48Somebody told me the funniest thing.
18:50They said,
18:51there's some in Washington saying
18:53that the tax cut caused the recession.
18:57I don't know what economic textbook they're reading.
19:01The best way to come out of a recession
19:03is to say to the small business person,
19:07we'll let you keep your own money.
19:08When we cut taxes on all rates,
19:10we said to the sole proprietor
19:12or the limited partner,
19:14it's your money,
19:15you spend it in order to expand
19:17the job base in America.
19:20There's going to be people who say
19:21we can't have the tax cuts.
19:23And I challenge their economics
19:25when they say raising taxes
19:28will help the country recover.
19:30Not over my dead body
19:31will they raise your taxes.
19:32He went all over the country campaigning
19:38for another round of big tax cuts
19:40on dividends, capital gains,
19:45hugely popular with the business community.
19:49President Bush was campaigning
19:51for another tax cut
19:52even as he was threatening to invade Iraq.
19:55We're confronting the outlaw regime in Iraq
19:58that is arming to threaten the civilized world.
20:01Even as we confront these dangers,
20:04you need to know,
20:05I know we have needs here at home,
20:07especially the need for a vigorous and growing economy.
20:11So I will continue to press the Congress
20:13to make tax cuts.
20:14The prevailing wisdom
20:17in the Bush administration
20:18was that no tax cut is too much.
20:22And Paul O'Neill said,
20:24wait a minute,
20:24if you're going to plan on a big, expensive war,
20:27is this really the time to be cutting taxes?
20:30Paul O'Neill was Bush's first Treasury Secretary.
20:33As President Bush was getting ready
20:34to recommend another tax cut
20:36beginning in early in 2002,
20:38I said,
20:40we shouldn't have another tax cut.
20:42Did you walk into the Oval Office at any point?
20:44You and the President
20:45and say,
20:46Mr. President,
20:46I've got to put it on the line
20:48for the country and for your administration.
20:50This is a terrible idea.
20:52I said,
20:52here are the reasons why we shouldn't do this.
20:54To him?
20:55Did you say that?
20:55Absolutely to him.
20:57Multiple times.
20:58What was the President's response?
21:01You know,
21:01he just,
21:02he didn't respond.
21:04Nothing?
21:05No.
21:06He had to say a word or two.
21:08No,
21:08absolutely not.
21:10The President didn't really want to hear what I thought.
21:13which was his right.
21:15I was happy to be fired
21:16at the end of November of 2002.
21:19I didn't want to be part of something
21:20I thought was fundamentally wrong.
21:22I would not have wanted
21:23to go and testify to the Congress
21:25that this was all
21:26a wonderful idea
21:28when I thought it was a terrible idea.
21:30And unfortunately,
21:30I turned out to be right.
21:31My fellow citizens,
21:41at this hour,
21:42American and coalition forces
21:43are in the early stages
21:45of military operations
21:46to disarm Iraq,
21:48to free its people,
21:50and to defend the world
21:51from grave danger.
21:53America was now at war
21:54on two fronts.
21:55In the past,
21:57when presidents go to war,
21:59eventually they have said,
22:00okay,
22:00this is really important,
22:02we have to pay for it.
22:03We either have to cut spending,
22:04we're going to have to raise taxes.
22:06Even Lyndon Johnson,
22:07after delaying,
22:09raised taxes
22:09to pay for the Vietnam War.
22:11President Bush never did that.
22:15The idea
22:16that you would cut taxes
22:18at a time of war,
22:19especially for the best-off people
22:20in America
22:21is really unprecedented
22:23because that means
22:23we put the entire tab
22:25for the Iraqi war
22:27and then the Afghanistan war
22:29and then the Iraqi war
22:30on our children's tab.
22:32Or to look at it another way,
22:33we borrowed money from China
22:35to give tax cuts
22:36to the best-off people
22:37in our society
22:38and leave our kids
22:39paying the bill
22:40for a war
22:41that we chose to fight.
22:42That was really unprecedented.
22:44Not only that,
22:44but when there were efforts
22:46by people
22:46within the administration
22:47to prepare
22:49the American people
22:50for a little bit
22:52of these costs,
22:53they were quickly
22:54swatted back.
22:56And the central example
22:57here is Larry Lindsey,
22:58who was President Bush's
22:59top West Wing advisor
23:00coming into office
23:01and he said
23:03the Iraq war
23:03is going to be
23:04fairly expensive.
23:05I forget the exact number
23:06he used,
23:06but I think it was 50 billion.
23:08And he was essentially
23:09fired for using that number.
23:11Now in retrospect,
23:11we know
23:12that was a vast,
23:13vast understatement
23:14of how much
23:15the Iraq war cost.
23:16But it seems pretty clear
23:17that there was not
23:18a huge amount of interest
23:19in doing
23:20an honest reckoning
23:22of how much
23:22this war was likely
23:23to cost.
23:24They tried not even
23:25including the cost
23:26of that war
23:26in their budgets.
23:28They would say,
23:28we'll deal with that
23:29with supplementals.
23:30And supplementals
23:31are basically budget bills
23:32which are sent
23:32outside the normal
23:33budget process.
23:34And so,
23:35from the get-go,
23:36there was a refusal
23:37to even do the accounting
23:39in an honest way
23:40about what these wars
23:41were costing us.
23:45Bush's campaign
23:46for a second round
23:47of tax cuts
23:47met with resistance
23:49even from members
23:50of his own party.
23:54In Washington,
23:56Senate Republicans
23:56did not have
23:57the 60 votes
23:58needed to pass
23:59the tax cut
24:00and block a certain
24:01Democratic filibuster.
24:02The Senate will come
24:03to order, please.
24:04So George Bush's party
24:06used a little-known
24:07parliamentary maneuver
24:08called reconciliation
24:10that allows passage
24:12of a budget bill
24:13by a simple majority
24:14of 51 votes.
24:16Reconciliation
24:16was always used
24:18for deficit reduction.
24:19The design
24:20of reconciliation
24:21was to make
24:22tough decisions
24:22about savings,
24:23deficit reduction.
24:25The idea is that
24:25this is so important
24:26to reduce the deficit
24:28that we will
24:30not require
24:32the 60 votes.
24:33That's the premise
24:34of it.
24:35What the Bush people
24:36did was turn that
24:37on its head
24:38and it was allowed
24:40to be used
24:40for tax cuts.
24:41Basically,
24:42as an end around,
24:43the 60 votes
24:44that are required
24:45in the Senate.
24:45That's right.
24:46That's what happened.
24:47So it's just
24:48a political maneuver.
24:50Yeah, they had
24:50a friendly parliamentarian.
24:54Vice President Cheney
24:55presided over the Senate
24:56as it voted
24:57on the tax cut.
24:59On this vote,
25:00the yeas are 50,
25:02the nays are 50,
25:05the Senate being
25:06equally divided,
25:08the Vice President
25:08votes in the affirmative
25:10and the conference report
25:12to accompany H.R. 2.
25:13One of the largest
25:14tax cuts in American history
25:16was passed
25:17with Vice President
25:18Dick Cheney
25:19casting the deciding vote.
25:26Two wars,
25:27two enormous tax cuts,
25:29deficits,
25:29and national debt rising,
25:31but the Bush administration
25:33was not done.
25:34Now I'm honored
25:36and pleased to sign
25:37this historic piece
25:39of legislation,
25:41the Medicare Prescription
25:42Drug Improvement
25:43and Modernization Act
25:44of 2003.
25:49Commonly known
25:50as Medicare Part D,
25:52or the Prescription Drug
25:53Benefit for Seniors.
25:56Medicare itself
25:56is the government program
25:58that pays the cost
25:59of medical coverage
26:00for people over 65,
26:01like Social Security.
26:04It's extremely popular
26:05among a very large part
26:06of the voting public,
26:08seniors.
26:09When Medicare
26:09was invented
26:10in the 60s,
26:12medicine,
26:13prescription drugs,
26:13were not a big part
26:14of health care spending.
26:16Over the years,
26:16medicine became
26:17a bigger part
26:18of health care spending,
26:19so there was a lot
26:20of pressure on Medicare
26:21to be expanded
26:22to cover prescription drugs,
26:24a totally reasonable
26:25thing to do,
26:26but there was no way
26:29to pay for it.
26:29The House will be in order.
26:32But the Bush administration
26:33pushed for passage
26:34of Medicare Part D anyway.
26:36Health care
26:37is not a partisan issue.
26:39It was one of the most
26:40contentious congressional
26:41debates in recent time.
26:42Something that seniors
26:43desperately need.
26:44Shame on the Republican Party
26:46for turning its back
26:47and releasing a torrent
26:49of red ink.
26:50And creating an all-new,
26:52massive federal entitlement.
26:54Republicans railed
26:55against the huge cost.
26:56This bill was written
26:59by and for
27:01the pharmaceutical companies.
27:02No competition
27:04whatsoever.
27:05Democrats called it
27:06a sellout
27:06to the big drug companies.
27:08Who is going to provide
27:09the prescription drugs?
27:11The chocolate chip
27:12cookie company?
27:13Give me a break.
27:15Shame!
27:16Shame!
27:17Shame on this Congress
27:18for betraying our seniors
27:19and ramming this bill
27:20through in the middle
27:21of the night.
27:22Voting in the House
27:23lasted until
27:24six in the morning.
27:25No wonder they want
27:26to do this
27:26at two o'clock
27:27in the morning.
27:27It finally passed
27:28by five votes.
27:30Why would a small
27:32government conservative
27:33initiate a program
27:35that is so massive?
27:36Politics.
27:37What do you mean?
27:39There's no group
27:40that votes
27:41at the rate
27:43and in the numbers
27:43as those over 55
27:46and 65 and over,
27:47certainly.
27:49And Democrats
27:50as well as Republicans
27:51want to please
27:53seniors
27:53and that's why
27:55our entire budget
27:55is tilted
27:56towards programs
27:57for seniors.
28:00The reason
28:01the Bush administration
28:02could pass
28:03Medicare Part D
28:04was that the
28:05Republican Congress
28:05in 2002
28:06had let a rule
28:07called
28:08pay-as-you-go
28:09lapse.
28:10It was a rule
28:11established by
28:12the first President Bush
28:13and a Democratic Congress
28:14to enforce
28:15fiscal discipline.
28:17His father
28:17endured some
28:18very serious
28:19political pain
28:19to do the right thing
28:20to get the deficit down.
28:21And one of the steps
28:22was a rule called
28:23pay-go
28:23or pay-as-you-go.
28:25And this rule
28:25basically meant
28:26that if you wanted
28:27to introduce
28:27a new tax cut
28:28or a new spending program,
28:29you had to find
28:30a way to pay for it
28:31with an offsetting
28:32tax increase
28:32or spending cut.
28:34Well, in 2002,
28:35that rule expired.
28:38In the Clinton years,
28:39we had the pay-go rule,
28:40pay-as-you-go,
28:42and that meant
28:43we couldn't pass
28:45a lot of
28:46good-sounding ideas,
28:47including
28:48Medicare
28:49prescription drugs.
28:51It's not that
28:52nobody thought of that
28:53in the 90s.
28:53A lot of people
28:54thought of it.
28:55But we couldn't
28:56pay for it.
28:57To pay for it,
28:57we would have had
28:58to have done
28:59a tax increase
29:00or cut out
29:02some other spending
29:03in major proportions,
29:04and nobody wanted
29:06to do that.
29:06So we didn't do it.
29:08But the Bush administration
29:10did do it.
29:11With pay-go
29:12no longer
29:13restraining spending,
29:14they had pushed
29:15through Medicare Part D,
29:17a program
29:18that's projected
29:18over time
29:19to cost as much
29:20as $8 trillion.
29:22They did not
29:23come up with a way
29:24to raise taxes
29:25or cut spending
29:26somewhere else
29:27to pay for it.
29:27So they just
29:29passed this thing,
29:30it goes into law,
29:32it's a promise
29:32to elderly people
29:33that will pay,
29:34subsidize their drugs,
29:36and we borrow
29:36every year
29:37to pay for it.
29:38And in the end,
29:39it's more expensive
29:40than the war in Iraq,
29:42because the war in Iraq
29:43ends at some point.
29:45Certainly it'll end now
29:46that Obama's president,
29:47but the prescription
29:48drug benefit
29:48will go on forever.
29:51It will go on forever
29:52because it's a promise
29:53made by the federal government
29:55to its citizens.
29:56You have plenty
29:57of refills on the others,
29:58so save this...
29:59Seniors are entitled
30:00to this benefit,
30:01just as they're entitled
30:02to Social Security
30:04and Medicare itself.
30:05Thank you so much.
30:06Pharmacist one, three, please.
30:07These entitlements
30:08are all enormously popular.
30:10Thank you very much.
30:11Appreciate you.
30:11But they're also
30:12enormously expensive.
30:13Medicare Part D alone
30:16will cost $60 billion
30:18this year.
30:19The expense of that,
30:21over time,
30:22unfunded liabilities
30:23for the government
30:24at a time when more
30:26people are reaching
30:27retirement age
30:28and qualifying for Medicare
30:29added more
30:31to the long-term
30:33obligations of the government
30:35than all of Social Security.
30:39Medicare Part D
30:40was the largest spending bill
30:42the president signed.
30:43But there were
30:46dozens of others.
30:49During his first
30:50five years as president
30:52with a Republican-controlled
30:53House and Senate,
30:55George Bush
30:56never vetoed
30:57a spending bill.
30:59Fiscal conservatives
31:00in his own party
31:02accused him of being
31:03the biggest spender
31:04since World War II.
31:06Six years of that
31:07was a disaster.
31:08I mean, you had spending bills
31:09coming up
31:10that were an embarrassment.
31:11I mean, any Republican
31:12who had spent their career
31:14talking about fiscal discipline,
31:16lower taxes,
31:17the private sector,
31:18had to be deeply,
31:20deeply angry
31:21about what the Republicans
31:22in the House and Senate
31:23were doing.
31:24The Republican Party
31:26have always stood
31:27for fiscal restraint,
31:28smaller government,
31:29lower taxes.
31:31But there's no question
31:33we didn't do a good job
31:33in restraining
31:34the growth of the government,
31:35and we spent a lot of money
31:37we didn't have.
31:38So, Senator,
31:40what happened
31:40to the Republican Party
31:42during those eight years?
31:42Well, what happened
31:44was that conservatives,
31:46when they took
31:49the majority position
31:49in the government,
31:50decided to use the government
31:51in a very aggressive
31:52conservative way
31:52to promote conservative programs
31:54and to spend money
31:54for conservative initiatives.
31:57Isn't that sort of
31:58not the conservative position?
32:01Absolutely.
32:01I think you'll find
32:02I voted against
32:03almost all that spending.
32:08The Republicans in Congress
32:10took the politically expedient route.
32:11They abandoned anything
32:13that was remotely similar
32:14to their small government heritage,
32:16and they voted for
32:17more spending,
32:19lower taxes,
32:20new entitlements.
32:21And they allowed
32:22to fall by the wayside
32:23all of the little,
32:25you know, rules
32:26that Congress had lived with
32:27for the previous decade,
32:28which had helped create
32:29the semblance
32:30of a culture
32:30of fiscal discipline.
32:35George Bush delivered
32:37on his promise
32:37to give the American people
32:39back their money.
32:41But today,
32:43the surplus he inherited
32:44is gone.
32:45The deficit this year
32:46is huge.
32:48And we borrow more
32:49and more.
32:52I think President Bush's
32:54legacy,
32:55in his mind,
32:56is not economic.
32:58It's that we didn't have
32:59a second terrorist attack.
33:02He protected us
33:04from another 9-11.
33:05And I think he prizes that
33:07above the fact
33:09that he squandered
33:10an opportunity
33:11of prosperity
33:12to try and resolve
33:14some of our long-term
33:15fiscal issues
33:16and to prepare
33:17for bad times
33:17like we have now.
33:18Barack Obama's first night
33:33as president
33:34was a celebration
33:34of hope
33:35after his historic
33:36ascent to the presidency.
33:38With large Democratic
33:47majorities in Congress,
33:49the new president
33:50seemed poised
33:51to bring the change
33:52he promised
33:53to Washington.
33:55But as night
33:56turned to day,
33:58the picture
33:58grew darker.
34:02The next morning,
34:03he began daily crisis meetings
34:05with his economic team.
34:06For weeks,
34:08they had been preparing
34:08a blueprint
34:09for a massive package
34:11of tax cuts
34:11and spending,
34:13a stimulus plan.
34:16The fiscal situation
34:17was a mess
34:18when he arrived.
34:20A really serious recession
34:21was already in place,
34:24capable of becoming
34:25a depression.
34:27This is a heck of a problem
34:29that Obama's inherited.
34:31There are new numbers
34:32out today
34:32that tell us
34:33the housing market
34:34is in dismal shape.
34:35Here's today's claim
34:36to bleakness.
34:3720,000 jobs
34:38cut at Caterpillar.
34:408,000 jobs cut by Scranton.
34:41President Obama
34:41went to Capitol Hill
34:42to make a pitch
34:43to the Republican minority.
34:45We've got a financial meltdown.
34:47We've got a stock market collapse.
34:48We've got a banking crisis
34:49where the banking system
34:50has totally imploded.
34:52The grim financial numbers
34:54got even worse today.
34:54Last week,
34:54unemployment claims
34:55hit 26 years.
34:56Businesses are scared to death
34:58and they're laying off people.
35:00Consumers are worried
35:01they're going to lose their job
35:02or someone in their family
35:03is going to lose their job
35:03and so they're not spending.
35:04Economists predicted
35:05the numbers would be bad,
35:07but this is even worse
35:08than expected.
35:09You've really got a situation
35:10where unless government
35:11steps in
35:12and tries to plug that gap,
35:15then we won't get through
35:16this immediate crisis.
35:18Good evening, everybody.
35:19Please be seated.
35:20The most important thing
35:22we can do
35:22for our budget crisis
35:24right now
35:25is to make sure
35:26that the economy
35:26doesn't continue to tank.
35:28And that's why
35:29passing the economic recovery plan
35:31is the right thing to do
35:32even though I recognize
35:34that it's expensive.
35:35Look, I would love
35:36not to have to spend money
35:37right now.
35:40This notion that somehow
35:41I came in here
35:42just ginned up
35:42to spend $800 billion,
35:44that wasn't how I envisioned
35:49my presidency beginning.
35:51Madam Speaker,
35:51you really can't be serious.
35:53And he may not have envisioned
35:54the fight that followed.
35:56This would be humorous
35:57if it wasn't so sad.
35:58Got this at 11 o'clock
35:59last night.
36:00Over 1,000 pages.
36:02What's in it?
36:02Have you read it?
36:04We found $30 million
36:05for mice.
36:06You say you haven't read it?
36:08I would say you have read it.
36:09You come down here
36:10and park holes about it.
36:12Say this is what's wrong with it.
36:13That's what's wrong with it.
36:14This bitterly partisan fight
36:16over his stimulus plan
36:17was exactly what Obama
36:19had campaigned against.
36:20$30 billion for a rat
36:22in San Francisco.
36:23Mickey Mouse is going to be envious.
36:25I wish the other side
36:25would make up their mind
36:26whether it's mice or rats,
36:28neither of which are in this bill
36:29if they will read it.
36:30This is a skunk.
36:33This bill stinks.
36:35Deeply embedded in Obama's pitch
36:36for why he should be the president
36:38was a proposal
36:38that he was going to make
36:39Washington change.
36:41He was going to get
36:42Republicans and Democrats
36:42to work together
36:43to stop the bickering,
36:44to come together
36:45in a more centrist fashion.
36:47Republicans spent too much
36:48over your money.
36:49Guilty as charged.
36:51This is not the solution.
36:53The government can't solve this problem.
36:56The American people have to solve it.
36:58Battle lines were drawn
36:59around familiar arguments
37:00over the role of government
37:01and taxes in spending.
37:03Obviously, Republicans,
37:05we've got ideas
37:05that lowering tax rates
37:07and allowing people
37:08to keep more of what they earn
37:10will allow them
37:11to spend that money,
37:12invest that money,
37:14or save it,
37:15all of which are good
37:16for the economy.
37:16We've got to cut spending
37:18and we need to cut taxes.
37:20That's the solution
37:20to the problem.
37:21I value the constructive criticism,
37:24but don't come to the table
37:26with the same tired arguments
37:28and worn ideas
37:29that help to create this crisis.
37:31The political dynamics here
37:34are a little bit tricky
37:36for Republicans.
37:37If things start to go well,
37:39either politically or economically,
37:41the Republicans are going
37:42to get essentially no credit.
37:44And so that really pushes
37:46them politically,
37:48I think,
37:49to be more of an opposition party
37:51rather than constructive partners.
37:54So hope that things go badly?
37:56I don't think they're hoping
37:57that things go badly.
37:58I'm just saying
37:59that there's not much in it
38:00for them to add 20 votes
38:03to the president's package.
38:05The clerk will call the roll.
38:07Mr. Akaka, Mr. Alexander.
38:09When the votes were counted,
38:11in the Senate,
38:11only three Republicans
38:13voted with the president.
38:14And in the House,
38:16not one.
38:16The nays are 183.
38:20The conference report is adopted.
38:22Without objection,
38:23a motion to reconsider
38:24is laid upon the table.
38:26I think the lesson
38:28of the stimulus
38:28is that you can actually
38:30offer $400 billion
38:32worth of tax cuts
38:33to Republicans
38:33and still they won't vote
38:35for your stimulus package.
38:36I think that's the lesson.
38:38Whether he makes
38:39that kind of an offer
38:40to Republicans again
38:41will be one of the interesting
38:42signs or tells
38:44about what he learned
38:45from the stimulus package experience.
38:48This is the easy part.
38:50If you can't get people
38:52to vote for giving money away,
38:53tax cuts and spending,
38:54imagine how it's going to be
38:56when you're taking things away
38:57and you're getting
38:57organized opposition.
38:59So it does not bode well
39:01for the bipartisan
39:02hold our hands,
39:03let's squeeze Social Security
39:05and Medicare
39:06for the good of our children
39:07operation.
39:09By the time the bill
39:11was signed,
39:12Barack Obama
39:12had added another
39:13$787 billion
39:15to the national debt.
39:17And since then,
39:22hundreds of billions more
39:24for homeowners,
39:25automakers,
39:26financial institutions.
39:28There are really serious
39:31economic challenges
39:32that we're facing right now
39:33and no one knows
39:35how bad this is going to get
39:36in the short term.
39:37But history is very clear
39:38that the way you take on
39:39these deep recessions
39:40is with government action.
39:42And so we have no choice
39:43but to very aggressively
39:44deal with this crisis now
39:45and then we have to try
39:47to pay the bills
39:47in the long term.
39:50According to the Office
39:51of Management and Budget,
39:52this year the deficit
39:53will be over $1.7 trillion,
39:56pushing the national debt
39:58to almost $13 trillion,
40:01the most it's ever been.
40:03But more important
40:04to economists,
40:05it is larger as a share
40:07of the overall U.S. economy
40:08than it's been in 50 years.
40:11There's no question
40:13that our deficits
40:14and debt levels
40:15are going to get worse
40:16in the short term.
40:17And that's a good thing
40:18as far as...
40:19And it's acceptable.
40:21It's not a good thing.
40:22It's acceptable.
40:25Madam Speaker,
40:27the President of the United States...
40:31President Obama
40:35has to assure the American people
40:38that he will do what it takes
40:40to turn the economy around.
40:43But he also needs
40:44to tell the American people
40:46the truth
40:47and let them understand
40:49that while we'll get through
40:51the current recession,
40:53it's not the big one.
40:54The big one would be a meltdown
40:56in the federal government's finances.
40:58And we need to start taking steps
41:00to defuse the ticking time bomb
41:01that threatens our future.
41:03We have lived through an era
41:05where too often
41:05short-term gains
41:07were prized over
41:08long-term prosperity.
41:10Where we failed to look
41:11beyond the next payment,
41:12the next quarter,
41:13or the next election.
41:15The surplus became an excuse
41:16to transfer wealth
41:18to the wealthy
41:18instead of an opportunity
41:20to invest in our future.
41:21And all the while,
41:22critical debates
41:23and difficult decisions
41:24were put off
41:25for some other time
41:26on some other day.
41:28Well, that day of reckoning
41:30has arrived.
41:31And the time to take charge
41:32of our future is here.
41:34The future is clouded
41:35by one inescapable fact.
41:38More Americans
41:38are living longer.
41:40As the population ages,
41:41by law,
41:42the government is obligated
41:43to spend more and more.
41:46This year,
41:47the first of the baby boomers,
41:49roughly 73 million of them,
41:52are turning 62.
41:54They're claiming early retirement
41:56for Social Security.
41:57Three years from now,
41:59before Barack Obama's
42:00first term is over,
42:01they'll turn 65
42:02and start making their claims
42:04on Medicare.
42:06To preserve our long-term
42:08fiscal health,
42:09we must also address
42:10the growing cost
42:11in Medicare
42:13and Social Security.
42:15Back in the 80s,
42:16I would write,
42:17we've got this coming tsunami,
42:18this demographic tsunami
42:19where baby boomers
42:21are going to start retiring
42:22and it's going to overwhelm
42:23our budget.
42:24It's here.
42:25This is the picture
42:27of the future
42:28that has so many people
42:29so concerned.
42:31Today,
42:32just over 40%
42:33of the federal budget
42:34pays for Social Security,
42:36Medicare,
42:36and Medicaid,
42:37the big entitlement programs.
42:40But according to
42:40Congressional Budget Office
42:42projections,
42:43here is how that spending
42:44grows over the next
42:4525 years and beyond.
42:48Eventually,
42:49there is no money
42:50available in the budget
42:51to pay for anything else
42:52because of the spending
42:54on entitlements.
42:55especially Medicare
42:56and Medicaid.
42:58We are on an
42:59unsustainable course
43:01right now
43:02because we have made
43:03more promises
43:04under three main programs,
43:08Medicare, Medicaid,
43:09and Social Security,
43:10principally the medical programs,
43:12than can be fulfilled
43:15at any sensible set
43:18of tax rates.
43:19So we've got a problem.
43:20So I ask this Congress
43:21to join me
43:22in doing whatever
43:23proves necessary.
43:24What are we going to do?
43:25Because we cannot
43:25consign our nation.
43:26Are we going to cut
43:27all the other things
43:27the government does?
43:29It's a really serious problem
43:31and it has not been
43:33seriously addressed.
43:35...the crushing cost
43:36of health care.
43:38Five weeks
43:38into his presidency,
43:40Barack Obama
43:40set the stakes.
43:42I suffer no illusions
43:43that this will be
43:44an easy process.
43:45Once again,
43:45it will be hard.
43:46Obama calculates
43:47that the health
43:48of the nation
43:49and the success
43:50of his presidency
43:50depends on whether
43:52he can persuade
43:53these men and women
43:54to transform health care
43:56in America.
43:57So let there be no doubt,
43:58health care reform
43:59cannot wait,
44:00it must not wait,
44:02and it will not wait
44:03another year.
44:09As politically difficult
44:10as it's going to be
44:11to make any change
44:12in the health care system
44:14and Medicare and Medicaid,
44:16why take that fight
44:17on now
44:18when you have
44:19this lurching economy
44:21which could be heading
44:22toward the darkest
44:23of recessions?
44:24Health care,
44:25in terms of the long-run
44:26fiscal condition,
44:27is easily our biggest problem.
44:29And so kicking it
44:30down the road
44:31just raises
44:33all kinds of risks.
44:34If, on the one hand,
44:35we are spending
44:36massive amounts of money
44:37to stimulate the economy now,
44:39and on the other,
44:40we feel like
44:41that over the long term
44:42we need to bring
44:42our deficit down,
44:43there is nothing
44:44more important we could do
44:45to bring our deficit down
44:46than take on health care.
44:48President Obama
44:49sends his first budget
44:50to Congress today.
44:52On February 26th,
44:53two days after
44:54his address to the nation,
44:55the president delivered
44:57his budget plan
44:57for 2010.
44:59The president is proposing
45:00to spend more than
45:01three and a half billion dollars.
45:03That is the size
45:04of the budget
45:04for next year,
45:05the largest in history,
45:06being sent to take America
45:07in a fundamentally new direction.
45:09And ambitious
45:10and costly programs
45:11for the environment,
45:12education,
45:13and health care.
45:14On health care,
45:15the budget commits
45:16more than $630 billion
45:18as a first crucial step
45:20to reform.
45:21He wants to cut back
45:22on Medicare spending
45:23while putting hundreds
45:24of millions
45:25to a universal health care.
45:25President Obama's
45:2510-year spending plan
45:26sets aside
45:27more than $600 billion
45:28as a down payment
45:30on health care reform.
45:31Obama's budget team
45:32argues that spending
45:33to reform health care
45:34will, in the long run,
45:36save money.
45:37I think what's very clear,
45:39the single most important
45:40thing we can do
45:41on our long-term
45:42entitlement problem
45:44is to reduce the rate
45:45of growth
45:46of health care costs.
45:47Everything else
45:48is almost a footnote.
45:50Peter Orzog
45:51is Obama's budget director.
45:53If health care costs
45:54grow at the same rate
45:55over the next four decades
45:56as they did
45:56over the past four decades,
45:58Medicare and Medicaid,
45:59those are the two
46:00federal health insurance programs,
46:03go from 5%
46:04of the economy today
46:05to 20%
46:06of the economy
46:07by 2050.
46:08So if you're looking
46:09at where the money is,
46:10it's in health care.
46:12And this budget
46:12is the most aggressive budget
46:14that I have ever seen
46:15in terms of moving towards
46:17a more efficient
46:18health care system.
46:21But first,
46:22Obama has to forge
46:23unprecedented cooperation
46:24among interest groups
46:25and politicians
46:26who have been battling
46:28over health care reform
46:29for decades.
46:31On March 5th,
46:32he gathered many of them
46:33at the White House.
46:34The greatest threat
46:35to America's fiscal health
46:37is not Social Security,
46:39though that's
46:39a significant challenge.
46:41It's not the investments
46:42that we've made
46:42to rescue our economy
46:44during this crisis.
46:45By a wide margin,
46:47the biggest threat
46:48to our nation's balance sheet
46:49is the skyrocketing
46:50costs of health care.
46:52It's not even close.
46:53The people we talk to
46:54who say,
46:55look,
46:55this is a tough,
46:57tough problem.
46:59And you're going
46:59to have to do
47:00either higher taxes
47:02or lower benefits
47:05or some combination
47:06of both
47:06to be able to really
47:08wrestle this problem down.
47:10Do you agree?
47:11Well,
47:11actually,
47:12I have a different perspective
47:13because so much
47:15of the cost
47:15of health care now
47:16doesn't actually,
47:17in terms of,
47:18quote,
47:18benefits,
47:18doesn't actually
47:19make beneficiaries
47:21healthier.
47:22Understood.
47:23But I want to be
47:23very clear.
47:24When it comes
47:25to both Social Security,
47:26Medicare,
47:27and Medicaid,
47:29higher taxes
47:30and or lower benefits
47:33are not off the table.
47:35No,
47:36they're not off the table,
47:36but again,
47:37I want to come back
47:37on Medicare and Medicaid.
47:39We can no longer afford
47:40an overall health care system
47:42in which the thought is
47:44more is always better
47:45because it's not.
47:46The evidence is very clear.
47:47That's just not factually true.
47:49Let me give you an example.
47:50Last six months of life
47:51in Medicare
47:52at the Mayo Clinic
47:53costs you and me today
47:55$25,000
47:56for each Medicare beneficiary
47:58at the Mayo Clinic.
47:59Medicare beneficiaries
48:01last six months of life
48:03at UCLA Medical,
48:05$50,000 a year.
48:07And I can tell you
48:07that we have no idea
48:09what we're getting
48:09in exchange
48:10for the extra $25,000
48:11a year
48:12at UCLA Medical
48:13because the quality indicators,
48:15if anything,
48:16are all higher
48:17at the Mayo Clinic.
48:18So it's not going
48:19to be easy.
48:20But even as the president
48:20tried to keep the focus
48:22on health care
48:22and fulfill the promise
48:24of health care
48:25in our time,
48:26questions about
48:27the overall size
48:28of the budget
48:28and the budget deficits
48:29something that Democrats
48:31and Republicans
48:32threatened to drown him out.
48:34There is no fiscal restraint
48:35in this budget.
48:36Looks like someone's
48:36cooking the books
48:37to hide.
48:38If we did nothing,
48:40the deficit would drop
48:40faster than it is
48:41in this budget.
48:42It's a legitimate concern
48:43for members of Congress
48:44here from both sides
48:46of the aisle
48:46that this level of debt
48:47is unsustainable
48:48in the long term.
48:50In Obama's budget,
48:51the debt will accumulate
48:52at an even faster rate
48:54than it did
48:54under George Bush.
48:55The deficits
48:56are so large
48:57that by 2017,
49:00the national debt
49:01is projected
49:01to be more
49:02than the entire
49:03economic output
49:04of the country.
49:05That hasn't happened
49:06since 1947.
49:08In 10 years,
49:09according to the budget plan,
49:11the debt will have
49:11more than doubled
49:12to over $23 trillion.
49:15While President Obama
49:17talks about the national debt
49:18and how bad it is,
49:19you have a budget proposal
49:20that is saying
49:21by its own numbers,
49:22its own reckoning,
49:23we will have doubled
49:24the national debt.
49:26That's massive.
49:28Right.
49:28We're in a massive
49:29economic downturn,
49:30right?
49:31And there are two reasons
49:32why you should run
49:33huge deficits.
49:34One is a war.
49:35We ran huge deficits
49:36during World War II,
49:38and I don't think anyone
49:38looks back and says
49:39that was a mistake.
49:41And two is a terrible
49:42economic downturn,
49:43which we're now in.
49:44That's fine.
49:45But it's eight years
49:47that will double
49:48the national debt.
49:50And as for figuring out
49:52how to solve that,
49:52it's sort of,
49:53we will, really.
49:55Yes.
49:55And I think that critique
49:56is fair.
49:57So I would like to see
49:59the Obama administration
49:59come out and be
50:00a little bit more honest,
50:02a lot more honest,
50:03about the fact
50:03that over the long term,
50:05taxes are going to have
50:05to rise,
50:06not just on the top 1%,
50:09although they will
50:09very much have to rise
50:10on the top 1%.
50:11They're probably going
50:12to have to rise
50:12on everybody else as well,
50:14in order to pay
50:14for Medicare,
50:15Social Security,
50:16the military,
50:17the other things
50:17our government does.
50:18Everybody wants
50:19more benefits.
50:20Everybody wants
50:21their Social Security
50:21and their Medicare,
50:22and they want it
50:23to be more generous.
50:24And at the same time,
50:25everybody wants
50:25lower taxes.
50:26And if you ask people,
50:28those two things
50:29don't add up.
50:30The American people
50:31are in a kind of denial.
50:33They're in a kind
50:34of denial,
50:34and I think
50:35their leaders
50:36find it risky
50:37to explain to them
50:38that it can't really
50:40go on like this
50:41forever.
50:41It's hard to sell
50:45a message of pain
50:46to Americans.
50:48It's hard to tell them
50:48that we have lived
50:50beyond our means
50:51and we're going
50:52to have to spend
50:52less money on benefits
50:54that you enjoy,
50:55and we're going
50:55to have to collect
50:56more taxes from you
50:57than we do now
50:58because we overpromised
50:59in the past.
51:01That's a very hard
51:02message to deliver
51:03when unemployment
51:04is low and everybody's
51:05feeling good.
51:05It's an impossible
51:06message to deliver
51:07when people are frightened
51:08that they're going
51:10to lose their houses,
51:10lose their jobs,
51:11and their kids
51:12are going to be
51:12out of work.
51:15But there are not
51:16enough revenues
51:16to pay those promises,
51:18so something has to give.
51:20While the urgent issues
51:21surrounding the
51:22immediate crisis
51:23dominate the meetings
51:24that President Obama
51:25has almost every day
51:26with his economic team,
51:28they are always shadowed
51:29by the specter
51:31of the looming debt.
51:32These warnings
51:33about the deficits
51:34and the debt,
51:36they're like a piece
51:36of furniture in the room.
51:38They're always there,
51:39and it never
51:40seems to happen.
51:42But one day
51:43it will.
51:43You know,
51:43you remember
51:44how people said
51:45house prices fall?
51:47House price inflation
51:48might slow,
51:49but it's never
51:50going to go negative.
51:51Well,
51:51now we know.
51:53Just because something
51:53hasn't happened
51:54for a long time
51:55doesn't mean
51:55it can't happen.
51:57And I think
51:57the issue
51:59of the sustainability
52:01of America's
52:02long-term borrowing
52:02is just the same.
52:04You get away
52:04with this for decades
52:05of over-borrowing
52:06and saving nothing,
52:07but then when it
52:08goes wrong,
52:09you're in trouble,
52:10big trouble,
52:11very, very quickly
52:12and it's hard
52:13to get out of.
52:14Not far from
52:16the White House,
52:17inside that room
52:18at an undisclosed
52:18location,
52:20the government
52:20keeps borrowing
52:21more money.
52:24Recently,
52:24China,
52:25the U.S.
52:25government's
52:26largest creditor,
52:27warned that so much
52:28borrowing has them
52:29worried.
52:30And the very next
52:31day,
52:32the president
52:32had to reassure
52:33the Chinese
52:34about the soundness
52:35of their investments.
52:38Meanwhile,
52:39in just the first
52:40three months
52:41of this year,
52:42the U.S.
52:43government
52:43has borrowed
52:43another $493 billion.
52:47There's more to explore
53:05at our website.
53:07Watch the full program
53:08again online.
53:10See analysis
53:10of why the national
53:12debt matters,
53:13how bad it is,
53:14and what the Obama
53:15administration should do
53:16about it,
53:17and read the extended
53:18interviews.
53:19And this budget
53:19is the most aggressive
53:21budget that I have ever
53:22seen.
53:22Only way to control
53:23spending.
53:24Unfortunately,
53:25I turn out to be right.
53:26It's an oh-my-god
53:27deficit.
53:27Cut, cut, cut, cut, cut.
53:28Plus facts about
53:29the national debt,
53:30who owns it,
53:31and how it's fluctuated
53:33over time.
53:34Then join the discussion
53:35at PBS.org.
53:37Next time.
53:48I've been everywhere, man.
53:50I've been everywhere, man.
53:52Frontline takes a road trip
53:53through America's
53:54health care system.
53:55It's $160,000,
53:57and I was covered
53:58for nothing.
53:59And the hard choices
54:00it creates.
54:01My medication
54:02is $1,000 a month.
54:03Bankruptcy.
54:04Or the health
54:05of our child.
54:05Well, how are you
54:06going to pay the bill?
54:07I said, you know,
54:08that's a real good question.
54:09Sick around America.
54:11Watch Frontline.
54:11Salvador, Amarillo,
54:12Socapella,
54:13Barringville,
54:13Ambedilla,
54:14Amagiller,
54:14I've been everywhere, man.
54:20Frontline's
54:20$10 trillion and counting
54:22is available on DVD.
54:24To order,
54:24visit shoppbs.org
54:26or call 1-800-PLAY-PBS.
54:35Frontline is made possible
54:53by contributions
54:54to your PBS station
54:56from viewers like you.
54:58With major funding
55:02from the John D.
55:03and Catherine T.
55:04MacArthur Foundation
55:05committed to building
55:06a more just,
55:07verdant,
55:07and peaceful world.
55:11With additional funding
55:13from the Park Foundation.
55:14This is PBS.
55:39You're talking about
55:40the center of legitimate power.
55:43An invisible world.
55:44I spent tens of millions
55:45of dollars
55:46bribing government officials.
55:47International bribery.
55:49What happens with black money
55:50is people steal it
55:51because they can.
55:53An international scandal.
55:54So we were talking
55:55about billions?
55:55Yes.
55:56Lowell Bergman investigates.
55:58You're busy poking around.
55:59It's got nothing to do with you.
56:00You should mind
56:01your own business.
56:02Black money.
56:06In Pakistan,
56:08children forced to choose
56:10between extremists
56:11and an army
56:12waging war
56:12on its own people.
56:14It's better to die
56:15than to live under the Taliban.
56:16And in South Korea,
56:18detox for internet addiction.
56:20When you go home,
56:21will you start
56:21using a computer again?
56:23Correspondent Douglas Rushkoff
56:24reports from
56:25the digital frontier.
56:26These stories and more
56:28on the next Frontline World.
56:32More than three decades
56:34after the Clean Water Act.
56:36This is sick.
56:37That looks it,
56:37but it isn't.
56:38It's like a cancer.
56:39Correspondent Hedrick Smith
56:41takes a hard look
56:42at why we have failed
56:43to clean up
56:44our poisoned waters.
56:46It's like a church.
56:54And you are depending on our
56:55woods.
56:55It's always Ribeih me
56:57and you love
56:58what's going on we Bay
56:58where we will
56:59keep moving.
56:59It's like if you
57:02are going toreldock
57:04and push
57:05into this program,
57:05it's called
57:06ihren
57:06him
57:07or
57:08he
57:09have
57:11on the
57:12shoulder
57:12you
57:13will