John Kerry's position on

Deficit Spending: The Congressional Budget Office projects that the US will add $1.9 trillion to the national debt over the next decade. According to Peter Orzag, Senior Fellow of Economic Studies for the Brookings Institute, "Sustained budget deficits have damaging economic consequences," including reduced fiscal flexibility in event of disasters and increased risk of financial disarray. CBO link. Brookings Link.

Description of candidate's position: Kerry intends to cut the federal budget deficit in half during his first term. To do so, he will return to the 1990s congressional budget rule of "pay as you go", which forced all increases in spending to be offset by equal spending reductions, revenue increases, or both. Furthermore, he plans to restrain discretionary spending to the caps of the 1990s and cut "unnecessary corporate welfare." With the savings from these steps, Kerry intends to bring down the deficit while cutting taxes for 98 percent of American families. Kerry Link PAYGO Link

Quotation from the Candidate: "President Bush has turned his back on the simple, bipartisan principle that guided everyone from President Clinton to Newt Gingrich in the 1990s: pay for all proposals…We must restore responsibility and fiscal discipline to our government, or the debt we pass on to our children will strangle opportunity for the next generation of middle-class Americans. Massive public borrowing keeps inflation and interest rates higher than they would otherwise be, and undermines long-term investor confidence in our economy. Today's deficits also pose a serious threat to our retirement security. They are financed by borrowing from Social Security Trust Fund surpluses at a time when the retirement of the baby boom generation makes that very risky." From Kerry's book Our Plan for America, page 71, link.

Assessment of the proposal:

Positive: In an "Open Letter to the American Public," ten Nobel Laureates in Economics endorsed John Kerry, stating that he "understands that sound economic policy requires a substantial change in direction" and has a plan that will address key budget issues such as health care costs. Link. 

Negative: The American Enterprise Institute, a conservative think tank including some of America's foremost economists, has found that "Kerry's proposed spending increases are greater than the revenue that might be generated from his tax proposals." Furthermore, Kerry's commitment to "pay as you go" would prevent "most if not all" of his spending proposals from becoming law. Link.

Comparison: President Bush also plans to cut the budget deficit in half over the next four years. Bush points out that his spending on homeland security and the military has been necessary and implies that this has been a contributing factor to deficits. To bring down the deficit, Bush will make government spending more efficient and propose a constitutional amendment allowing a line-item veto to cut unnecessary spending. Link.

Link to Bush's issue page