When Mick Mulvaney was a congressman, the House had no bigger deficit hawk. And last fall, while running the Office of Management and Budget, the former South Carolina representative was on a similar kick, warning Congress of “the dire consequences of irresponsible and unnecessary spending.”
But a short tenure in Donald Trump’s White House has changed that. While briefing GOP lawmakers before the president’s recent State of the Union speech, acting chief of staff Mulvaney was asked about its absence of any mention of the deficit. His answer: “Nobody cares.”
His comment received only passing attention. But nothing so epitomizes the transformation of the GOP under Trump as its abandonment of the traditional Republican interest in curbing federal spending and reducing a deficit that continues to rise, despite the strong economy.
On the surface, that is changing this week, with a budget that claims Trump’s policies will reduce the deficit by more than 60 percent over the next decade and, according to acting Budget director Russ Vought, “will balance in 15 years.” Don’t believe it. A better indicator is that Trump’s campaign promise to pay off the entire national debt in 8 years has long since been forgotten.
Two recent statistics underscore the change. First, a recent Treasury report said that, in the first 4 months of the current fiscal year, the deficit soared 77 percent over the previous year, a product of lagging corporate revenues after the 2017 tax cut and increased defense and Medicare spending. Second, Trump’s new budget projects a $987 billion deficit for next year – despite continued prosperity.
Unfortunately, the budget deficit – and a national debt that has grown more than $2 trillion under Trump – has faded almost totally as a political issue. Neither party is making a major effort to control it, though nonpartisan economists continue to warn of fiscal disaster as the soaring costs of entitlements and interest on the debt consume an ever greater part of the federal budget.
Even in his budget, Trump is acting as if “nobody cares.” The main cuts are again in the already hard-hit discretionary domestic programs; the savings are a modest $30 billion, which the White House knows Congress won’t approve. Proposed cuts in Medicare and Medicaid likewise face dubious prospects, but there is no serious effort to tackle those entitlement programs’ soaring structural costs.
The president’s top economic adviser, Lawrence Kudlow, recently said the administration is “concerned” about the rising debt but doesn’t think it’s “an issue or a problem,” given the strength of the economy.
Trump acknowledged last month he has put aside his pledge to eliminate the national debt. “Before I can focus too much on that,” he said, “we have no choice but to straighten out the military,” which has received increased funds each year of his presidency.
One thing he has not abandoned is accusing predecessor Barack Obama of increasing the debt more “than any other president combined,” a comment that, while factually correct, is misleading. The former president inherited a deep recession, which lowered tax revenues and required increased federal spending to rescue the economy. The deficit soared to $1.4 trillion in his first year, before beginning to come down.
Starting in 2010, it went down 6 straight years as the economy improved, before turning slightly upward in his last year. But Obama’s main budgetary fault was to dismiss the controversial budget-reduction package proposed by his own bipartisan commission, headed by former Wyoming Republican Sen. Alan Simpson and former Clinton White House Chief of Staff Erskine Bowles.
Much of their proposed $2.9 trillion in spending cuts and $2.6 trillion in tax increases over a 10-year period was probably not politically viable. But Obama backed away from embracing it and was also unable to reach agreement with former Republican House Speaker John Boehner on a massive bipartisan deficit-control package.
Given how Trump decried the debt, and former GOP House Speaker Paul Ryan’s reputation as a deficit hawk, Republican moves to tackle the deficit might have been expected when the GOP took full control of the government in 2017. Instead, they concentrated on passing a tax cut giving the biggest benefits to corporations and the wealthiest taxpayers.
Boosted by the big increase in defense spending, the deficit reached $873 billion last year and is projected at $984 billion this year, a level the Office of Management and Budget predicts will continue in the short term – even with economic growth projections higher than most private groups expect.
Meanwhile, some Democrats are promoting a plan they contend would increase Social Security benefits for many Americans – and improve the program’s long-term solvency by raising payroll taxes. But it’s unlikely to pass in the current gridlocked Congress, and the biggest long-term issues concern Medicare, not Social Security.
If the Democrats regain the White House in 2020, deficit reduction is unlikely to be their top priority, given campaign promises to extend health insurance coverage and enact a long-overdue infrastructure construction program.
As usual, it will take a more immediate emergency for Congress to act.
Note to readers: Carl P. Leubsdorf is the former Washington bureau chief of the Dallas Morning News. Readers may write to him via email at: firstname.lastname@example.org.