After the Republicans gained control of the US Senate in the 2002 election , giving them across-the-board dominance of the legislative and executive branches of the federal government, the key players in the administration of President George W. Bush gathered to discuss fiscal policy.

Vice President Dick Cheney wanted to cut taxes for the rich.

Treasury Secretary Paul ONeill was skeptical. According to his recounting of the incident in Ron Suskinds brilliant book, The Price of Loyalty , ONeill expressed concern that a trillion dollars worth of tax cuts had already been enacted. ONeill was no liberal. He liked tax cuts. But with the country rebuilding from the economic slowdown after the 9/11 attacks, and with a war being fought in Afghanistan and another on the horizon in Iraq, ONeill noted that the budget deficit was increasing. And he argued against Cheneys position, suggesting that another tax cut was unnecessary and unwise.

You know, Paul, Reagan proved that deficits dont matter, said the vice president. We won the mid-term elections, this is our due.

ONeill was, according to Suskind, left speechless.

But Cheney wasnt done. He and the Bush-Cheney administration that he served as CEO piled up deficits and debts. Indeed, as The New York Times has well noted , Under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didnt foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obamas policies, taken out to 2017, add to deficits, but not by nearly as much.

Now, a decade later, Cheneys party is arguing that deficits matter. A lot. House Republicans are so fretful that they are willing to steer the country toward chaos by refusing the compromises that would avert across-the-board sequester cuts. Other Republicans uncomfortable with sequestration are pushing an austerity agenda thats better organized than the sequester, but potentially even more painful.

So was Cheney right in 2002? Or is he right, now, when he cheers on Republican attacks on Obamas spending and says , I worship the ground Paul Ryan walks on?

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