Some See Deficit Boost to Fight Recession as a Cure Worse Than the Disease

WASHINGTON — To battle the risk of recession, lawmakers are reviving another economic ill: a skyrocketing budget deficit.

After watching the national debt swell by a staggering $3.5 trillion over the past seven years, analysts now hope the fiscal cure for the economy won't be worse than the disease.

"We were already relying on a big deficit to prop up the economy, and now we're saying we need an injection of even more debt," said Robert Bixby, executive director of the Concord Coalition, an Arlington, Va., group that advocates a balanced budget. "We need to start weaning the patient from this deficit addiction."

On Wednesday, the Congressional Budget Office estimated that the federal government will spend $250 billion more than it takes in this year.

That's a $56 billion increase over last year's deficit, owing chiefly to the expectation that tax revenues won't keep up with spending increases due to a slowdown in the economy.

In hopes of staving off a downturn, President Bush and congressional leaders are crafting a stimulus package meant to jump-start consumer spending and business investment.

Bush has proposed a package of spending hikes and tax cuts worth a total of $150 billion. That alone would raise this year's deficit to $400 billion.

This is Washington, though, and the stimulus tab is almost certain to rise, as each party rushes to use the stimulus imperative to justify aggressive action on its pet priorities. For the Democrats, those are enhanced unemployment benefits and food stamps, while Republicans favor deeper tax cuts.

Already, members from both parties are warning against expanding the stimulus package in ways that might further cause the deficit to spike.

"First, do no harm," Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, cautioned Wednesday. "I am concerned that in our rush to help, we will talk ourselves into a quick, feel-good hit today that will leave us with a bigger budgetary hangover tomorrow."

There's fiscal headache enough already.

Since Bush took office seven years ago, the national debt has risen an unprecedented $3.5 trillion. It now stands at a record $9.2 trillion, or about $31,000 for every man, woman and child in the country.

Last year taxpayers spent $238 billion — equal to the total economic output of Portugal — just to pay the interest on the debt.

Money used to pay that interest, amounting to $790 per American, can't be used for economic stimulus or any other purpose. Much of it flows overseas, where $2.2 trillion of U.S. debt is held.

With the national debt increasing by an average of $500 billion a year since Bush took office, Bixby argues that the economy has been stimulated plenty by excessive government borrowing. Now, he worries, the need for further stimulus will dig the country deeper into the deficit hole.

"We've already had a lot of fiscal stimulus," he said. "There is clearly a danger that Congress and the president, in an election year, will overdo the stimulus bill. ... If they overdo it, they're actually going to make the situation worse."