When President Bush takes his last flight on Marine One next week, he will leave behind a national debt that increased by about $5 trillion on his watch. It’s by far the biggest increase under any president in U.S. history. The national debt was $5.7 trillion when President Bush took office. The latest debt numbers are more than $10.6 trillion.

In 2000, when President Bush was elected into office, the nation’s finances were looking pretty good. With the economy expanding, it was a good time to save for a rainy day. In 2002, however, Vice President Cheney told then-Secretary of the Treasury Paul O'Neill that “deficits don't matter.” Since then, lawmakers and the administration have ignored fiscal prudence. Over the last eight years, we have seen some of the largest government spending increases in our nation’s history. 

So now, in addition to the $700 billion bailout and the proposed $825 billion stimulus package, we have also spent $451 billion on interest on the national debt in FY 2008. With reductions in federal revenue of about $166 billion from dwindling tax collections , and these sizable spending increases, it will take some time to get our country back on a fiscally responsible track.

The first step is to figure out how to turn this financial titanic around. Most economists argue that it is necessary to spend your way out of a recession, thus deficits are okay. But why not start looking for ways to save, cut, and reform our way out of record deficits as part of the efforts to get the economy back on track?

Waiting won’t make these tough decisions any easier. Already, lawmakers and others are asking President-elect Obama to delay efforts to reform Social Security. From our standpoint, it is vital that at this time of big ideas and “post-partisanship” we start moving on such issues.

Secondly, if we are going to find significant savings in the federal budget, we have to keep all options open.  All pork and all programs should be on the table when it comes to bringing down the deficit. But, the focus of the debate needs to be where the biggest savings can be found, which happens to be two areas politicians are most afraid of cutting:  entitlements and defense spending. While there are no short term savings to most fixes for Medicare & Social Security, we can’t fix our long term fiscal problems without addressing their financial underpinnings. And with $500 billion in annual defense spending, it will take a meat cleaver rather than a paring knife to cut it down to size.

Rather, we should have learned not to count our fiscal eggs before they hatched. It was decided under the Bush Administration that we would increase spending to record levels, to fund the Global War on Terror and other priorities, and implement massive tax cuts. Meanwhile the tough decisions necessary to balance the books were put off and ignored. And the veto pen was an endangered species as the administration caved to the big spenders on Capitol Hill over and over.

If not taken on, this legacy of debt will hamstring the Obama Administration. The cost to turn this economy around and then to start enhancing our nations finances are so high that it is unclear how the new administration is going to be able to focus on much else.

There is no question in anyone’s mind that the number one priority for the next administration has to be getting the derailed economy back on track. But for our country’s long-term success, the new administration will need to pursue a recovery with an eye towards fixing our budgetary mess.