Deficits as far as the eye can see
White House budget director Mick Mulvaney took to the airwaves over the weekend to pour oil on the troubled congressional budget deal waters. Recall that the deal in question blows up the budget caps put in place in 2011, and increases spending on defense and domestic programs roughly $300 billion over the next two years. It also pushes the next debt limit vote to 2019.
Given the shocking possibility this deal could return the country to the trillion dollar annual deficits of yore, this has left some folks, like our friend, and committed deficit hawk, Dan Mitchell, deeply disgusted. Not just because of the new wave of red ink, but because of what all that increased deficit spending means to the wider economy:
The budget caps have been busted again as part of a new agreement. To be blunt, the swamp has triumphed over taxpayers. The politicians who promised to clean up the mess in Washington have decided that the cesspool is actually a hot tub.
And while they get cozy, the private economy will have to wrestle with higher interest rates (nevermind the future generations thta will have to pay for today's spending orgy). That's not a recipe for economic growth. So what about those GOP spendthrifts on Capitol Hill? Mitchell has few kind things to say about them, or the President, in this debacle:
Republicans claim, for what it’s worth, that the deal was necessary to get higher defense spending. I question that goal (we already spend enormous amounts of money compared to any potential adversaries, and I also think we shouldn’t squander blood and treasure on overseas nation building). But even if one believes in more defense spending, why add huge increases in domestic spending?
Why not copy Franklin Roosevelt and Harry Truman, both of whom reduced the burden of domestic spending when increasing defense outlays?
My pro-GOP friends in Washington respond by stating that Republicans didn’t have 60 votes to overcome a filibuster in the Senate. That’s a legitimate point, but I respond by asking why they didn’t force Democrats to conduct a real filibuster (hold the floor for 24 hours a day, 7 days a week)?
They then tell me that a filibuster (assuming Democrats didn’t get tired of holding the floor) would mean stalemate and eventually could result in a shutdown. Another fair point, but I then point out that left-wing constituencies are the ones that will feel the pinch if non-essential parts of the government cease operating.
At this point, the truth usually comes out and they tell me that Republican leaders can’t play hardball because too many of their members actually like big government.
By the way, I put a greater share of the blame on the Trump Administration. If the White House drew a line in the sand and told Congress it would block any spending above the caps, lawmakers would have been forced to prioritize. But since Trump doesn’t seem to have any interest in fiscal restraint, we’re getting a repeat of the profligate Bush years – with congressional Republicans figuring they may as well take part in the feeding frenzy.
I’ll close by noting that this isn’t the end of the world. Yes, we have far too much discretionary spending, and the additional spending in this agreement is bad news. That being said, the extra outlays are relatively trivial compared to the gigantic problem of ever-expanding entitlement spending.
But the fact that Republicans aren’t willing to enforce any discipline on discretionary outlays certainly does not bode well for the presumably more-difficult battle for genuine entitlement reform.
Michell goes further, wagering that inflation-adjusted spending will increase faster under Trump than it did under Obama. Given what we saw last week, we'd be wary of taking that bet.
But what the exercise does tell us is that spending restraint appears to be quite dead. And so too are the long held GOP talking points about restraining the size and scope of the federal goverment.
How did your House member vote on the budget deal? Here is a link to the roll call vote.