With debt out of control, Republicans can’t be intermittent fiscal hawks
After a hiatus during the Trump years, Republicans are back in the mood for fiscal probity.
It’s very strange not to seriously pursue a deeply held goal when you have unified control of Washington, then to insist on trying to achieve much of it in one fell swoop when you barely have control of one chamber of Congress.
But here we are. This is the Republican pattern. It has been, fundamentally, driven by the fact that two Republican presidents in a row now have won the White House by effectively running against the fiscal conservatism of the party’s congressional wing.
George W. Bush’s compassionate conservatism was an implicit rebuke of Newt Gingrich’s bomb-throwing majorities that tried to balance the budget at all costs. Donald Trump’s Make America Great Again populism was a rejection of Paul Ryan’s debt-obsessed majority that hoped to move the goal posts on entitlement reform.
The problem is that Ryan was right about the substance and Trump is right about the politics, and that dilemma is why the country’s debt-to-gross-domestic-product ratio is nearly 100% and is projected to keep climbing.
It had looked like GOP fiscal hawks had either all molted into big-government populists or at least were happy to associate themselves with that flock. So it’s been some comfort to anyone concerned about spending that the House Republican backbench has sounded almost indistinguishable from the GOP conference back in the Tea Party heyday of 2011.
Of course, Republican budget hawks would have more credibility if their passion and commitment didn’t seem contingent on — with some honorable exceptions — a Democrat being in the White House.
But the barely comprehensible levels of pandemic-era spending over the last three years, when Washington has run more than $7 trillion in budget deficits, should be enough to give anyone pause.
As the economist Herb Stein famously said, if something can’t go on forever, it will stop. No one can know how long we can go on with the debt on the current trajectory without baleful consequences — it could be 20 years, it could be 20 months. Prudence suggests we should avoid finding out.
And that inevitably means squeezing the entitlements that Trump says shouldn’t be cut by a penny.
If the federal budget consisted only of discretionary spending, it’d be in decent enough shape; mandatory spending is where the action is.
As budget maven Brian Riedl of the Manhattan Institute points out, in 2032, Social Security, health entitlements and interest costs are projected to account for 86% of the increase in spending over 2008 levels. The growing Social Security and Medicare shortfalls will account for almost all the growing deficit over the next 10 years. (The 2017 GOP tax cuts contribute to the projected deficits, but only marginally.)
The scale of the challenge means Republicans are unlikely to produce any plan to balance the budget in 10 years, certainly not one without huge magic asterisks.
Making some progress against spending this year during the debt-ceiling fight would be welcome, but the GOP’s expectations for the showdown should be realistic.
Republicans should seek limits on discretionary spending (although it’s tricky because now is not the time to cut back on defense spending); push some technical, not particularly important savings on entitlements; and embrace the TRUST Act that would create bipartisan committees to at least get the conversation going on how to keep Social Security and Medicare from going insolvent and/or overwhelming the budget.
More important than what happens over the next few months is whether the party can nominate and elect a president in 2024 who, unlike Bush and Trump, is in sympathy with the fiscal conservatism of House Republicans.
Ronald Reagan quipped that the deficit was big enough to take care of itself. Now it’s big enough that no single high-stakes battle or act of Congress is going to tame it. Fiscal hawks have to be in for the long haul.
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