Republicans talk a big game on fiscal responsibility, but don’t be fooled: Today’s GOP has gone soft on budget deficits.
This week, the new House Republican majority adopted rules aimed at controlling federal spending. That sounds innocuous enough, but a closer look at the new rules reveals the GOP’s dirty little secret: in their zeal to shrink government, Republicans have abandoned the fight to rein in America’s colossal budget deficits.
This year’s budget deficit is estimated to be about $1.7 trillion. Since House leaders adamantly oppose raising taxes to close the gap, they’d have to make epic cuts in federal spending to make even a modest dent in the deficit. But as the New York Times reports, House GOP leaders already are backing off on their promise to hack $100 billion out of domestic spending this fiscal year. Since Republicans also insist on sparing the Pentagon from the budget ax, that would have meant draconic cuts (between 20-30 percent) in domestic programs. Sobered GOP leaders are now talking about cuts in the $50 billion range.
The assertion, pressed most vehemently by Tea Party types, that fiscal discipline can be restored through spending cuts alone is new. Don’t forget that Ronald Reagan signed 11 major tax increases, including a whopper in 1988 amounting to 2.7 percent of GDP. George Bush’s willingness to boost taxes (and tax rates) as part of his 1990 budget helped set America on a course toward the budget surpluses later achieved on Bill Clinton’s watch.
By taking taxes off the table, House Republicans are breaking with their own party’s tradition of fiscal rectitude and saying, in effect, they don’t care all that much about deficits. Evidently for this curious new breed of fiscal “conservative,” expanding deficits in pursuit of smaller government is no vice.
That’s the real message sent by the new rules adopted Wednesday, which seem calculated to lock in big deficits as far as the eye can see.
Most egregious, for example, is their new “cutgo” rule. Under existing “paygo” rules, new tax cuts or spending increases must be offset with tax increases and/or spending cuts. Cutgo, in contrast, says that any new spending must be paid for by spending cuts alone, and it exempts tax cuts from offsets altogether. In other words, their costs will simply be added to the deficit. Similarly, changes in budget reconciliation rules would bar spending increases in reconciliation bills, but allow tax cuts. Expect a torrent of new tax expenditures as lawmakers realize that they can dole out new tax favors without the bother of paying for them.
If the new rules weaken fiscal discipline on the tax side of the federal budget, they do strengthen constrains on the spending side. For instance, they include a new point of order on legislation which increases mandatory spending at any point over the next four decades. They also repeal the “Gephardt Rule,” which allows lawmakers to avoid an on-the-record vote on raising the debt ceiling. The Committee for a Responsible Federal Budget offers a detailed analysis of the new rules here.
Unfortunately, the overall effect of the new rules will be to undermine serious bipartisan negotiations to curb both federal spending and deficits. The Senate, still controlled by Democrats, rightly will reject the GOP’s transparent bid to force all the painful decisions to the spending side of the ledger. As a slew of recent reports by bipartisan fiscal commissions show, there’s no plausible way to deal with America’s debt explosion without closing tax loopholes and raising revenues. Even such hard-core fiscal conservatives as Sen. Tom Coburn (R-OK) recognize the need to curb tax expenditures. By impeding the search for common ground on fiscal issues, the House GOP’s anti-tax fundamentalism only delays the inevitable day of reckoning, at enormous cost to the nation’s economic prospects and the public’s confidence in their government’s ability to solve urgent problems.
Unlike House Republicans, U.S. voters think deficits matter, not just the level of public spending. This is especially true of independents, who abandoned Democrats in last year’s midterm elections in part because of their spendthrift ways. To these voters, big deficits connote not just chronic mismanagement of the nation’s economy, but also a breakdown in political responsibility in Washington.
That’s why President Obama and progressives should miss no opportunity to drive home the reality that Republicans are now the party of big deficits.