Mitch Daniels Says Iraq And Afghanistan Wars Played A 'Very, Very Small Part' In Budget Deficit

WASHINGTON -- Indiana Gov. Mitch Daniels (R), who once served as a top budget official to President George W. Bush, is denying that the wars in Afghanistan and Iraq have seriously contributed to the federal budget deficit.

In an interview on WNYC on Wednesday morning, host Brian Lehrer asked Daniels whether Democrats "have a point" when they "complain that Bush caused much of the debt problem by putting the Iraq and Afghanistan wars off the books."

"No, they really don't," replied Daniels, who said it wasn't useful to look "backwards":

It's not necessary to defend any of those decisions. You just have to look at the factual math and see that they are a very, very small part of the problem we've come into. This is the deadest horse in the corral, but people keep trying to ride it.

We're putting on twice as much debt in the first five years of this administration, as in we're doubling the debt in five years, tripling it in 10. There's more deficits in any two years including the prospective proposals of this administration than the Bush administration piled up in eight.

The famous tax cuts -- you cancel them all, you solve a single digit percentage of the problem that we have going forward. You know, I don't spend any time really in the books. I try to avoid looking backwards or casting blame at anybody for the bubble, for instance, that's really the biggest cause of our current situation. I think in a situation as urgent as the one we face, Brian, looking around to point blame is a waste of precious time. Question is what do we do now?

Bush tapped Daniels to serve as director of the Office of Management and Budget and gave him the nickname of "The Blade" for his budget-cutting prowess. He served in the Bush administration from 2001 to 2003, during which time the United States invaded both Afghanistan and Iraq.

Daniels has tried to create a reputation as a budget hawk and became known as a strong fiscal conservative during his brief flirtation with a possible 2012 GOP presidential run.

But Jim Horney, vice president for federal fiscal policy at the left-leaning Center on Budget and Policy Priorities, said Daniels' comments don't line up with reality.

"It seems to me the wars have made a big contribution to deficits over the last decade," Horney said, noting that while funding for the wars has decreased over the last few years, there has been a substantial amount spent on them.

"We've estimated that wars in Iraq and Afghanistan -- just direct funding for the wars -- and the extra interest payments on the money borrowed to fund the wars through the end of this year, will account for about $1.2 trillion of the federal debt held by the public. That’s a very substantial number," Horney added.

He estimated that direct funding, coupled with the extra interest payments on money borrowed for the war through the end of this year, will account for $1.2 trillion of the federal debt held by the public.

The New York Times recently ran on editorial stating that the reason the United States went from huge surpluses in the Clinton administration to current huge deficits is largely because of "the Bush-era tax cuts, war spending in Iraq and Afghanistan, and recessions."

In February, Daniels also defended the Bush tax cuts in an interview with Fox News, saying he was "proud to be part of that administration."

"I think the original tax cuts were good and timely and helped the economy to recover very very quickly from that recession," he said. "But if you want to know what I think about fiscal issues, don't look at 2 1/2 years when I was in the supporting cast with no vote. Look at six years where I was in a responsible position, submitting budgets and fighting for them. There's the record that I think is most accurate."