On Friday, President Donald Trump signed a $2.2 trillion coronavirus stimulus package in order to provide essential relief to individuals and businesses struggling with the fallout from the social distancing measures required to fight the spread of the virus. The government arguably had the responsibility to help the economy after the government warned citizens not to shop at businesses and — in many cases — avoid going to work.
These are not normal times, and Congress has responded quickly to this crisis for that reason. Fiscal conservatives who rightly warn that America’s current deficits and debt are unsustainable joined with hard-left progressives who complain that the government does not control enough of the economy in order to pass crucial relief legislation.
The stimulus bill could have been better tailored to the situation, but congressional leaders worked with Treasury Secretary Steve Mnuchin to rush a bipartisan deal to meet America’s economic needs as fast as possible. For this reason, Democrats’ efforts to temporarily block the bill and capitalize on the crisis by ramming their Christmas wish list down Americans’ throats were disgusting and cannot be forgotten.
Yet Americans must move forward, and that requires taking a hard look at the country’s finances. The national debt stands at $23.3 trillion, higher than America’s $19.39 trillion GDP in 2017. Congress needs to face facts: we must get our fiscal house in order.
National crises like the coronavirus threat should serve as a wake-up call. America needs a fiscal surplus, a rainy-day fund, to deal with situations like this. Instead, the country has a ballooning deficit. America is borrowing money it does not have to bail out a distressed economy in the midst of the crisis.
While Democrats are practically leaping over one another in promising “free” health care, “free” education, and “free” goods and services for minority non-binary transgender poodles, Republicans are slow to enact important reforms to sweeping entitlement programs like Medicare, Medicaid, and Social Security. Millions of Americans rely on these programs, so reforms need to be smart and tailored to preserving benefits for the neediest, but reforms are essential.
President Donald Trump’s 2017 tax cuts also helped simplify the tax code, but they are not enough — and sadly, they left many Americans feeling like they paid more in taxes because they received smaller refunds (even though the original withholdings were also smaller). The tax code needs a serious overhaul in order to simplify matters. Americans appreciate lower taxes, but the federal government needs revenue to meet demands like those presented by the coronavirus crisis.
The coronavirus crisis and the ballooning debt should reorder Americans’ priorities. Smart, tailored reforms to entitlement programs are essential. Simplifying the tax code is paramount so that even if taxes need to be raised to meet crisis demands, Americans understand where their money goes and just how much they are really paying.
The federal bureaucracy also needs to be simplified. Businesses may be willing to pay more in taxes if they can work with freer hands, held back by less red tape. The Competitive Enterprise Institute has compiled many of the regulations that the Trump administration has loosened during the coronavirus crisis, noting that these regulations were “never needed” in the first place.
The deregulation process would open up the economy, leading to increased growth which translates to more revenue even at lower tax rates. A central first step would be the REINS Act, a bill that would remove from the federal administrative agencies the lawmaking power that rightly belongs to Congress under the Constitution. Under the REINS Act, regulations that would cause tremendous ripple effects in the economy would have to pass both houses of Congress and be signed by the president, just like any law. Not only would this restore Congress’s rightful place under the Constitution, but it would also limit the expansive red tape choking economic freedom.
Gov. Scott Walker (R-Wisc.) found a way to leave Wisconsin with a surplus, even after cutting taxes. It may not be possible to replicate all of his reforms at the national level, but Walker’s success suggests it is possible to get America’s fiscal house in order.
America needs to be cognizant of its financial situation and work hard to get back into the black. The coronavirus caught us with our proverbial pants down, and it will take tremendous determination to hoist those trousers back up to our waist. If Congress can pass a $2 trillion stimulus bill, it can take a long hard look at entitlement reform, simplifying taxes, and deregulation.
If it costs $2 trillion to save the economy in a crisis, it sure would be nice for America to have $2 trillion extra ready to go for next time.
Tyler O’Neil is the author of Making Hate Pay: The Corruption of the Southern Poverty Law Center. Follow him on Twitter at @Tyler2ONeil.