slatten49 Loc: Lake Whitney, Texas

Why Republicans who once fought budget debt now embrace it

Josh Boak

WASHINGTON (AP) -- When did Republicans stop worrying and learn to love budget deficits?

Over the next decade, their tax plan would add at least $1 trillion to the national debt. That would be on top of an additional $10 trillion in deficits over the same period already being by forecast by the Congressional Budget Office. As a share of the economy, the national debt would be rising to levels last seen during the height of World War II.

This borrowing spree would mark a sharp reversal for Republicans who made a career of sounding the alarm that mounting national debt would ultimately crush the economy and perhaps impoverish future generations. House Speaker Paul Ryan warned back in 2013 that endless deficits would "weigh the country down like an anchor. In short, we are on the verge of a debt crisis."

But on Friday, as the Senate debated its version of tax legislation, which it passed early Saturday, a rather different Republican Party was in full view. The party's few remaining deficit hawks, like Sen. Bob Corker of Tennessee, were clearly out of step with most in their party.

"Obviously, I'm kind of a dinosaur on fiscal issues," Corker said ruefully before declaring his opposition to the bill.

So what changed?

Republicans gained control of the House and Senate as well as the White House, said Robert Bixby, executive director of the Concord Coalition, an advocate for fiscal responsibility. Its all-inclusive control gave the party the leverage to focus on slashing tax cuts, rather than taking the sometimes painful steps required to curb the debt, which would likely do little on the eve of an e******n year to rally their donors and base of v**ers.

"When you don't have to make legislative compromises and have things you want to do, it's easy to set aside fears about the budget deficit," Bixby said.

Congressional Republicans had more incentive to reduce the deficit when President Barack Obama was in office. They ultimately agreed to the 2011 Budget Control Act to pare the deficit by mandating nearly $1 trillion in automatic spending cuts in return for raising the government's borrowing authority.

The historically low U.S. interest rates that have prevailed for nearly a decade have made managing the debt less of a burden than in the 1980s under President Ronald Reagan. What's more, the U.S. economy has steadily improved as the unemployment rate has fallen to a 17-year low of 4.1 percent. So any anxiety that deficits could stifle growth has lessened despite the rising debt.

Rather than worry about the debt, President Donald Trump has been eager to increase it. He campaigned on the promise of extravagant tax cuts. And he welcomed the prospect of borrowing to finance them in hopes that the economy would start gushing with growth.

"It's called priming the pump," he said in a May interview with The Economist magazine.

In fact, the president pledged that economic growth propelled by the tax cuts would be so much more robust than the tepid average annual growth rates of roughly 2 percent of recent years that the deficits would start to fall after two years. His budget director, Mick Mulvaney, has gone so far as to argue that higher deficits are even necessary to produce sustained 3 percent annual growth.

Mulvaney contends that such growth would eventually cause the national debt to decline. Treasury Secretary Steve Mnuchin has repeated similar versions of this argument that the tax cuts would, over time, pay for themselves.

But no independent analysis of the tax plan has shown that it could generate nearly enough growth to shrink the deficits. Mnuchin's own Treasury Department never released an analysis to support such claims.

Indeed, the Joint Committee on Taxation concluded this week that, even with a bump in growth, the Senate tax bill as written at the time would swell the national debt by $1 trillion over 10 years.

Upon the release of that conclusion, a spokeswoman for Senate Finance Committee Chairman Orrin Hatch dismissed it as "curious" and deserving of "further scrutiny." The response suggests that Republican lawmakers are taking it on faith that the tax cuts will generate their own revenue. No leading economist agrees with this belief.

In a survey released last week, the University of Chicago asked 42 top academic economists — including Nobel prize winners — whether they thought the tax cuts would expand the debt. All said the debt would be higher.

jack sequim wa Loc: Blanchard, Idaho

How much of the debt will be a result of tax cuts, and what percentage has nothing to do with tax cuts?

Can the cbo predict the amount of 25 trillion off shore that will return to the US?

Why is the cbo reluctant to use algorithms applied to predictive hiring resulting in tax revenue from millions of Middle class earnings?

Why is no one talking about the lack of algorithms that would include predictive figures of President Trumps reducing government spending? Does he not have 3 years left to accomplish cuts?

Why does the cbo not factor in "realistic" GDP" growth? In only a few short months we see 3.3%, Trump says to expect 5%, how would 4.5% effect the deficit?

Why has the cbo not factored in the decrease of unemployment, and projected 25% under employed over the next 5 years (likely 3-4 years)?

Why is the cbo not factoring in the nearly 2 trillion saved as a result of President Trumps immigration reform?

How will reductions in government health care spending under President Trump calculate in?

Your post is inaccurate opioniated bias, period!!!
Sadly it is based on unt***hs, unfactual, manipulated math.

teabag09

When has the CBO ever been right? Mike

jack sequim wa Loc: Blanchard, Idaho

Exactly.

Funny how the cbo waxes and wauns to political interest.

slatten49 Loc: Lake Whitney, Texas

Respectively, Jack, you could not have determined whether your questions were answered in the CBO's report based on the information provided in the above article. Thus, just as you wrote..."Your post is inaccurate, opinionated bias, period!!! Sadly it is based on unt***hs, unfactual, manipulated math" and theoretical perspective.

It is safe to say that much coming out of the beltway of D.C. (as well as the pages of OPP) is exactly that...favoring one view or another. Time will tell the tale of this prospective legislation's results. But, as is usual in a budgetary dispute, unwarranted optimism accompanies this bill.

slatten49 Loc: Lake Whitney, Texas

For sure, it would be foolish to suggest that the CBO's forecasts have always been right...or, that they have always been wrong.

slatten49 Loc: Lake Whitney, Texas

I believe that was the point of my post just below this one of yours.

PoppaGringo Loc: Muslim City, Mexifornia, B.R.

Oh, how the democrats joyously embraced deficit spending for eight years but now that the shoe is on the other foot, vociferously denounce it.

slatten49 Loc: Lake Whitney, Texas

No argument there, Salty. But why is it, that now, the GOP embraces deficit spending after vociferously denouncing it the previous eight years? Besides, as you know...congress sets the budget, not the president.

http://www.outsidethebeltway.com/presidents-dont-set-budgets-congresses-do/

PoppaGringo Loc: Muslim City, Mexifornia, B.R.

That is true. The Dems didn't even have a budget for the first 7 years of Obummers reign.

jack sequim wa Loc: Blanchard, Idaho

Respectively ( and I actually do respect you) even in differences.

I based everything posted on past experience of CBO's past methodology.
I also laugh when articles try to gain favorable credibility quoting "top economist" we can count one hand, how many economist have actually had accurate mid and long term forecast.
The best of the best can be quoted stating under Obama's policies the US would economically collapse by 2014, then 2015,2016
T***h be told our economy is based on a dozen major factors, and dozens of minor factors, coupled with dozens of international factors. Even the handful that get it mostly accurate, they still miss the mark.

These are the reasons I came down very negative on the author of the post.

Have a great day,
Jack

jack sequim wa Loc: Blanchard, Idaho

I believe the reason congress and the die hard budget minded are not throwing a fit, is because they have congressional plans, unshared todate of budget cuts, and elimination of government entities.

slatten49 Loc: Lake Whitney, Texas

That makes sense.

slatten49 Loc: Lake Whitney, Texas

Understood, Jack. I always appreciate honest and respectful discourse. That is what I most seek on this forum.

"Weakness on both sides is, as we know, the motto of all quarrels." [quote attributed to Voltaire]

jack sequim wa Loc: Blanchard, Idaho

I think some (a few) of your views get confused with some of the trolls on this site that have the same view. I have to remember your not a l*****t, more an independent that leans left, having nothing in common with the kevyns, turds,.......