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Posts tagged as “federal debt”

Another endangered species

September 25, 2018

jones

Informed Potomac observers report that the population of Republican deficit hawks on Capitol Hill has suffered a catastrophic drop since January of 2017. It is not entirely clear what has caused the sudden decline, although some attribute it to incumbency fever, which can be brought on by dread of losing elective office.

Republicans in the House of Representatives are ballyhooing a pre-election tax cut bill that would contribute about $3.5 trillion to federal deficits over the next two decades. According to the Tax Policy Center, the bill would reduce federal revenues by $631 billion in the next ten years and by around $3.2 trillion in the following decade. Seems like a costly measure to save a few seats in Congress, but I’m sure they are worthy seats.

This proposed tax cut is in addition to the budget-busting tax cut bill passed last December, which will result in a $1.5 trillion revenue shortfall over the next decade. It is not entirely clear why either tax cut was fiscally sound, given the fact that our economy has been continuously expanding since the time my dear old GOP almost wrecked it ten years ago.

Mitt Romney recently said, “With a booming economy, full employment, a soaring stock market, and record asset values, we should be shrinking the deficit, not growing it.” His statement echoes the Republican fiscal values I learned from GOP leaders back in the 1960s and 70s. My boss and mentor, former Senator Len Jordan, told me that Republicans were fiscally responsible, believed in balanced budgets, and knew they should raise sufficient revenue each year to cover federal spending.

I recall hearing lip service to such principles from Republicans in Congress up until the end of 2016, but those voices have largely gone silent since then. Prior to that time the mantra was that there would be no additional spending, even for such necessities as relief for Hurricane Sandy victims, without a commensurate cut in other programs. Now the mantra is cut taxes and increase spending. It is fiscally irresponsible and hypocritical of those who profess to be concerned about debt and deficits to fail or refuse to raise sufficient revenue to cover outlays.

The deficit for the current year is approaching $1 trillion or, in scary fiscal digits, $1,000,000,000,000. Three years ago, it was just $430 billion. Yet, there is hardly any GOP hand-wringing anymore about the travesty of saddling future generations with massive public indebtedness. Perhaps the thought is that unchecked climate change will do us in before the debt bomb can, so why worry.

Federal debt held by the public is currently $16 trillion (the total gross U.S. debt is now over $21 trillion). According to JPMorgan, the federal debt held by the public at the end of 2018 “will exceed all debt that U.S. households have for mortgages, credit cards, cars, student loans and other personal loans for the first time in modern history.” The public debt will top $127,000 per household by the end of this year, while personal household debt averages about $126,000.

Douglas Durst, the son of the billionaire who placed the debt clock near Times Square in New York City, opines that “America has more of a revenue problem than a spending problem.” He suggests that wealthy people like him should pay more in taxes. That might be a better answer to the budget problem than an additional tax cut, which would send the debt clock (which displays the total gross U.S. debt) into hyperdrive.

We need to take drastic action to restore the depleted population of deficit hawks. Voters can help by eliminating their natural enemy—the revenue-loathing turkeys.

Come for cuts, stay for hypocrisy

September 22, 2018

johnsonlogo

Few issues so clearly define the extent of the Trump takeover of the Republican Party as the GOP’s wholesale abandonment of concern about deficits and debt. Once the principle talking point of nearly every Republican “fiscal responsibility” is now as quaint as a president who isn’t an unindicted co-conspirator.

The most recent assessment of the federal budget deficit by the independent Congressional Budget Office (CBO), as the Washington Post notes, drew a collective shrug on Capitol Hill. Consider the CBO’s language about the issue.

“The federal budget deficit was $895 billion for the first 11 months of fiscal year 2018 … $222 billion more than the shortfall recorded during the same period last year. Revenues were 1 percent higher than in the same period in fiscal year 2017, but outlays rose by about 7 percent.”

CBO confirmed what everyone from eastern Washington to the White House knows that the deficit increase “was almost entirely due to the new Republican tax law and Congress' routine decision to increase spending.”

And, oh, the deficit is on pace to top a cool trillion dollars by the end of the current fiscal year. The total debt is north of $21 trillion. So much for fiscal responsibility or the abandonment thereof.

It’s difficult to find a better example of where GOP legislators have gone from deficit hawks to missing in action than Idaho. Senator Mike Crapo still has a debt counter feature on his official website, but you need to go way back to the Obama Administration to find an even remotely recent hint that he is as hawkish on debt as he once was. In January of 2016, after blasting Obama for pursing “more unrestrained spending,” Crapo lamented that we “continue to ignore our debt and simply try to spend our way into prosperity with borrowed money."

That was then, this is now and with a Republican in the White House Crapo has clammed up. You can search high and low on his website, in public statements and interviews and not find a word of criticism for “Trump’s exploding deficit” or the “growing national fiscal crisis.”

Senator Jim Risch never takes on the Trump Administration, of course, but a year ago he condemned a “pattern of reckless, uncontrolled spending [that] threatens the future of our country and ensures our children and grandchildren have a bleak financial future. Congress must cut spending and recognize that we do not have a no-limit credit card to fund everything everyone wants.”

That is simply a hollow, cynical and hypocritical assessment. Republicans control both houses of Congress and the executive branch. They largely determine spending priorities and they alone passed the further enrich-the-rich Trump tax cut that has, but I repeat myself, exploded the deficit. Crapo and Risch were, of course, enthusiastic supporters of the tax cuts – each claiming the tax cuts would pay for themselves; they don’t – and in order to maintain deniability in the shell game that passes for fiscal policy in Washington, D.C. each routinely votes against spending bills. Such an approach is the political equivalent of eating your chocolate cake, while ignoring the peas. The deficit hawks have flown the coop.

Democrats certainly don’t have clean hands on spending issues, but to his credit Obama did convene a bi-partisan effort to address the steadily worsening problem. Crapo served on that commission – the Simpson-Bowles Commission – and actually endorsed a reasonable approach of spending cuts and tax increases. On his website he says “working with both Republicans and Democrats, the Commission examined all aspects of our nation’s budget and tax code and proposed recommendations to Congress and to then-President Obama for consideration.” Crapo neglects to note that then-Republican Speaker John Boehner bailed on a deal with Obama when he couldn’t deliver GOP votes in the House.

Today Simpson-Bowles seems like ancient history and given the GOP hegemony in Washington, and the reluctance of people like Crapo and Risch to take on their own party on taxes, any deficit-debt progress seems like a pipe dream. The reality is that the GOP has, at least since Dwight Eisenhower, valued tax cutting more than it has valued a balanced approach to fiscal policy. In fact, the Trump-era GOP has essentially declared “deficits be damned,” with House Republicans wanting to cut taxes even more before the current Congress ends.

Perhaps, given the political climate of our day, only people no longer in Congress can speak truth about taxes and spending and debt. “History will show you there’s no country in history that’s been strong and free and bankrupt,” John Tanner (D-Tenn.), a co-founder of the Blue Dog Coalition who retired in 2010, recently told the Washington Post. Or as Utah senate candidate Mitt Romney recently reminded his fellow Republicans, “We called for an amendment to balance the budget. Just a few years ago, the Tea Party movement brought new energy to the issue. But now that Republicans are in charge in Washington, we appear to have become silent about deficits and debt.”

Don’t forget to remind your grand kids who bequeathed such a mess.

Marc C. Johnson was press secretary and chief of staff to Idaho Gov. Cecil D. Andrus. His biography of Montana New Deal-era Sen. Burton K. Wheeler will be published early next year by the University of Oklahoma Press. He lives in Manzanita, OR.

First take

August 22, 2015

More and more in politics, I get the urge to reply back that "no, that's not self-evident," when I hear a politico delivering a seemingly axiomatic platitude about something or other. For example, there's the matter of (federal) government debt: People have to balance their budgets, shouldn't the government? And especially: Having big, long-running government debt is wrong and dangerous and wrecks the economy and will crush our grandchildren. (I've seen a long string of Idaho politicians in particular build careers around that case.) But it isn't true. As no less than semi-libertarian Rand Paul has remarked, the United States government has carried a debt since 1835 - and we seem to have done well in the nearly two centuries since. Great Britain's government has been in debt since before the Industrial Revolution, and managed to create a world empire nonetheless. In his latest column, Paul Krugman takes on the subject, noting (in contrast to so much of what you hear) that "Believe it or not, many economists argue that the economy needs a sufficient amount of public debt out there to function well. And how much is sufficient? Maybe more than we currently have." Check out his argument, and then take a fresh look at the debt worriers. - rs (photo/Andrew Magill)