The American people made their views on ending the war in Iraq abundantly clear on Nov. 7, 2006, firing the president's party's congressional majority. Later that week, President Bush proposed a "surge" of 20,000 additional American soldiers to be deployed in Iraq. Today, a majority in Congress supports withdrawal of almost all American military forces in the next year, two years, whenever is most immediately practicable. Now, President Bush is preparing us for the possibility of a permanant presence in Iraq.

Whatever else one might think about the Bush war policy in Iraq, it's fantastically expensive already. With a fiscal look forward, Senate Budget Committee chair Kent Conrad (D-ND) had this to say about it on the floor of the Senate yesterday:

On the war alone--and this puts in perspective the war costs--you will recall the President told us that the war would cost $50 billion. We are at $567 billion and counting. Now... President Bush has indicated and his administration has told us that we should expect a Korea-like" presence in Iraq. Here is what this would mean, according to the Congressional Budget Office. So far, the war in Iraq and Afghanistan has cost $567 billion. CBO tells us a "Korea-like" presence would mean an additional $1 trillion in the period 2009 to 2017, and from 2018 to 2057, another $1 trillion, for an addition of $2 trillion to the $567 billion already committed. So the war that was supposed to cost $50 billion is now headed for $2.5 trillion, if we maintain a "Korea-like" presence, as called for by the President.

The Center for American Progress has done a nice job illustrating data that the National Priorities Project just released on who's bearing the cost of the war. You can check out your state and see how much of the nearly $193 billion supplemental you'll be paying.

But the thing is, for the most part, nobody's paying anything to finance this war just yet. We're just racking up more debt, and that'll have to be paid off from now until eternity.

When the bill comes due, most likely it'll go like this: no politician worth their salt will support a massive progressive tax increase to pay off all the debt generated by the war. So instead, the annual interest paid on the debt will grow, putting more pressure on discretionary programs that typically help working and middle class people. This means either programs will grow slower or be cut. A tax increase could pay for part of it. But unless it's a big and hyper-progressive tax increase, which it probably wouldn't be, President Bush and the Republican Congress will have succeeded in making the middle and lower classes pay for this war.

Another way to look it is how we've been paying for the war: i.e. to a great extent, by borrowing from the Social Security trust fund. By law, the government will have to replace the money it's borrowed. But it's quite plausible that social security solvency will be achieved by payroll tax hikes and benefit reductions, at least in part. When that time comes, let's not forget what we're really paying for.

When Congress proposes to buy kids health care and actually pay for it, or prevent cuts to vital social programs, the President opposes it. Deficit-financed war is a-o-k, though.

Donny Shaw at the invaluable OpenCongress.org had an interesting interpretation of the SCHIP vote in the House:

When the Democrats took over Congress in January, they passed new, hardcore budgeting rules known as PAYGO that require them to account for any spending increase by creating an equal increase in revenue elsewhere. With SCHIP, their fiscal heroism proved bittersweet; the revenue increase proposal they agreed upon ended up costing congressional Democrats the critical Republican votes they needed to get their proposal enacted.

Under the the proposal, the expansion would be funded entirely by a 61-cent per pack increase in the tobacco tax. The tobacco industry didn't like this plan and they showed it by flexing their lobbying muscles with representatives from the tobacco states (North Carolina, Kentucky, Georgia, South Carolina, Virginia, and Tennessee). In the end, only one of the 33 Republican tobacco-state representatives voted for the bill. That's a support rate of only 3 percent, significantly lower than overall House Republican support rate, which was 22 percent. With about 15 other "nay"-voting representatives who could be considered persuadable "aye" votes -- the 6 Democrats who opposed it, the 1 who voted "present," and the 8 who didn't vote -- even a modest improvement in the rate of tobacco-state-republican support could have made all the difference with this bill.

That's certainly possible. But an even more plausible explanation for the regionally divided vote is the old red state-blue state dyanamic. Red-state Republicans are generally more conservative than their blue-state counterparts, who also represent more vulnerable districts. If you just look at red-state Republicans, as opposed to tobacco state Republicans, I imagine the voting ratio would be pretty similar. That's probably the more obvious explanation, but that doesn't mean it's less true.

Plus, only three of the 8 Democrats who voted against the expansion came from tobacco states. And some Democrats from tobacco states voted for the bill, including Rep. Health Shuler (D-NC) and Jim Cooper (D-TN).

And let's accept that the tobacco tax swung some votes. But what would the votes have looked like if a) it hadn't been paid for or b) it was paid for with a different tax increase or spending cut? Recall that the tobacco tax was included at the initial suggestion of Sen. Gordon Smith (R-OR) as pay-for that'd be acceptable to moderate Republicans.

I wouldn't rule out Shaw's explanation, but more than a vote count is necessary to make it compelling.

The Brookings Institution will be hosting an event to get the presidential candidates focused on the deficit. But only six years post-Clinton, they may be tilting at windmills.

A quick look at the web sites for the top three Democratic candidates for president reveals not a thing about their views on governmental borrowing. None of them list "fiscal responsibility" or any of its variation as a high priority issue. Most telling was Sen. Barak Obama's (D-IL) recent speech laying out his tax policy platform, in which not a cent would be devoted to deficit reduction (and the Brookings Institution hosted the speech!). Meanwhile, Republican candidates are fixated more on fiscal "discipline" than responsibility- another way of proposing to cut spending a little and give out monster tax breaks.

All the Democratic candidates support PAYGO. But I see no evidence that any candidate has paid a price for their inattention to deficit reduction. Deficits, per se, just don't seem to matter much to the public. This is somewhat unfortunate, because the $3 trillion run up in the debt is a big deal, and the public needs to know more about it.

Here's what I propose: Fiscal responsibility-ists could get the public's attention by talking about the spending projects that account for the debt increase. Unlike deficit reduction, they happen to be high profile issues. For example:

• The war in Iraq is unpopular, important and entirely deficit-financed. We all will be paying for it through payments on the debt. Most likely, the debt payments will be paid for through more taxes, spending cuts or spending foregone. Combined, they will be relatively more regressive than if taxes had been increased on the wealthy. This may get people who are concerned about the war interested in the debt.
• I imagine the public does not know that the tax cuts will have to be paid for because they were deficit-financed. The Brookings/Urban Tax Policy Center (and...yes the Hamilton Project) has documented that the tax cuts will reduce incomes for over three-fourths of the public. You know why you didn't know that? Because borrowing conceals who really pays the bills. We all pay for the tax cuts, through payments on the debt. Those who object to the regressivity or ineffectiveness of the tax cuts may then get interested in the debt.

Bottom line: the debt is important mostly because it shows that the Bush Administration and the Republican Congress's many costly policies were not a free lunch. The public ought to be educated about the impact of these policies, and who was responsible for them. Fiscal responsibility-ists are the people to teach them.

But the time when the public believed debt is important mostly because of its inherent harmfulness is over.

Update: See this Watcher article for more

Sometime before its Columbus Day recess, the Senate will vote on legislation to raise the ceiling on the national debt to nearly $10 trillion. Treasury Secretary Paulson wrote congressional leaders on Wednesday that the statutory limit of $8.965 trillion would be reached Oct. 1.

Last week, the Senate Finance Committee OK'ed boosting the debt limit by $850 billion to $9.815 trillion. The House did likewise without a roll call vote (under the so-called 'Gephardt' or 'Hastert' rule) when it adopted the fiscal 2008 budget resolution in May.

The national debt is the total accumulation of annual budget deficits, which must be financed with borrowed money -- it has increased 40 percent during the Bush presidency (see chart below).

If the debt limit is not increased, Treasury would be unable to pay interest on existing notes and bonds or borrow more funds needed to keep the government operating and to pay debt obligations coming due. The United States has never defaulted on a single debt payment. To do so would put it in the rarified company of rogue and third world countries.

The last time the statutory debt limit was last increased, in March 2006, the Senate cleared the legislation, 52-48, with all Democrats and only three Republicans voting against the measure.

More partisan posturing and "Punch-and-Judy" pugilism would be a disservice to the American public (see the concurring opinion cited by my colleague Matt). Americans deserve a robust debate about the fiscal future of the nation that asks us to consider:

• what trade-offs are involved in long- versus short-term budget commitments?
• which investments in infrastructure, entitlements and other domestic are the highest priorities?
• whether the tax cuts of earlier this decade should be extended?

As Sen. Tom Coburn (R-OK) told Senate Minority Leader Mitch McConnell (R-TN) yesterday:

Congress should be required to make the same difficult choices about financial priorities that are made every day by American families. It's no wonder that only 11 percent of the American public has a positive view of Congress... The debate over whether to increase the debt limit provides Congress with yet another opportunity to show American taxpayers that it has the courage to make tough decisions about spending priorities.

Change the word 'spending' to 'budget' and I bet we can get a unanimous consent agreement on that one. How about it?

Alan Greenspan hit a hornet's nest when he disparaged the Bush fiscal policy record in his new book.

Responding to Greenspan's comments, President Bush, yesterday:

"I would also argue that cutting taxes made a significant difference, not only in dealing with a recession and an attack on our country, but it also made a significant difference in dealing with the deficit because the growing economy yielded more tax revenues, which allowed us to shrink the deficit."

Vice President Cheney, today:

The economic growth encouraged by the president's tax cuts is now producing sharply increased federal tax receipts -- up by nearly 15% in fiscal year 2005 alone, nearly 12% in fiscal year 2006, and projected to rise nearly 7% in the fiscal year that will end this month.

Once again, the Bush administration is saying that tax cuts pay for themselves. This theory has been refuted by almost all credible economists- including ones working in Bush's Treasury Department. These tax cuts just didn't and won't generate substantially more growth. No more growth, no increase in tax revenue because of the tax cuts.

So if tax cuts for the wealthy don't pay for themselves, who pays for them? Well, we all do.

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To follow up on yesterday's post, Debt on Arrival, the Senate Finance committee acted today, voice voting to increase the debt limit by $850 billion to close to $10 trillion. That's a 14-digit figure, in case you are counting.

Amid some partisan discussion over who is to blame for the 40 percent increase in the national debt during the Bush/GOP-Congress years of 2001-06, Sen. Jon Kyl (R-AZ) took the high ground during the committee's debate on the debt limit. Assigning blame for the $3 trillion increase is puerile, beneath the Senator's dignity. "Let's be careful about playing political games," said Kyl, noting that earlier in the day the Senate approved a Transportation-HUD appropriations bill exceeding the White House budget request by nearly $6 billion.

That's 6, much higher than 3 -- talkin' real money now!

The Finance Committee's ranking member Charles Grassley (R-IA) remarked that "refusing to [raise the debt limit] is like refusing to pay your credit card bill." The voice vote was unanimous in favor, though Grassley informed colleagues that one absent member, Sen. John Ensign (R-NV) wished to be recorded as a "no" vote. [Query: Does Mr. Ensign get subprime APRs on his credit card debt?]

The country's single most sobering fiscal milestone -- or millstone -- may be when the national debt reaches another trillion dollars. During the United States' first 225 years in existence, such an occasion has transpired five times -- when Bill Clinton left office, the national debt was $5.95 trillion.

During the presidency of George W. Bush, it has occurred four times. The fifth time is a grim inevitability sometime this fall, with the Senate prepared to increase the statutory debt limit to nearly $10 trillion, a new all-time record, in the next few weeks.

The Senate Finance Committee is due to mark up legislation to do just that tomorrow. The new limit, $9.815 trillion, was tacitly approved in May by the House, where a rule allows such legislation to be passed automatically with the adoption of the budget resolution.

What happens if the debt limit isn't raised? The idea that the U.S. Government would default on its debt borders on the unthinkable. The catastrophic results would include bond market chaos, followed by soaring interest rates, a rush out of U.S. and probably global stock markets, a run on banks, and flashbacks of the 1930s.

Better not to think about.

One of the nastiest features of the national debt is how expensive it is. During the Bush years, the interest expense of the debt has climbed to nearly $400 billion a year -- money the government is obligated to pay the borrowers who finance it. Put it this way: without the national debt, we could almost double spending on every single domestic discretionary program. Or we could be conducting three additional Iraq-sized wars this year.

Even better not to think about.