Congress and Trump are Playing 'Budget Roulette' While the Nation Sleeps
Insights and Issues Editor John Merline calls the coming budget deal "A Budget Disaster of Epic Proportions." It's not hyperbole.
The Congressional Budget Office now estimates that, unless Congress and the White House come to grips with spending, projected deficits over the next three decades will “drive federal debt held by the public to unprecedented levels — from 78% of gross domestic product in 2019 to 144% by 2049.” Interest payments alone will start to swamp the budget, making it all the harder to ever get to a balanced budget.
Nobody in Washington cares because by then, they'll all be dead or out of office and it will be someone else's problem.
The constraints placed on the budget in 2011 were casually tossed aside:
The 2011 budget caps, remember, were part of the Republicans’ deal with President Obama, which they secured in exchange for letting some of President Bush’s tax cuts expire. To give the caps teeth, the deal included a sequester provision that imposed automatic, across-the-board spending cuts if Congress couldn’t figure out how to live within its means.
For a time, those spending caps actually worked.
Overall, federal outlays declined for three years straight after that agreement, when you adjust for inflation. As a share of GDP, spending shrank from 23.4% down to 20.2%. Lo and behold, the world didn’t come to an end.
Those shackles on the budget weren't perfect, but they served as a brake on the massive increase in spending by Democrats the first 3 years of the Obama administration.
How about now?
Since then, however, Congress lost interest in spending restraint, and the floodgates reopened. Despite the technical existence of spending caps, outlays have shot up 19% in real terms since 2014. Spending is up nearly 9% in just the past two years alone. As a share of GDP, federal expenditures have crept back up to 21.3%.
Merline has pegged the reason why both parties are addicted:
In fact, it is exactly how Washington has worked for decades. This is a place where politicians splurge today, and promise to repent tomorrow. And where “compromising” means adding your differences together, rather than splitting them.
Thus, as a result of this “compromise,” Democrats are boasting that not only did they get a huge boost in domestic spending, they are “pleased that our increase in non-defense budget authority exceeds the defense number by $10 billion over the next two years,” according to the statement issued by House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer.
Trump has been a willing accomplice in this budget massacre. Despite his promises to "drain the swamp," The Washington Examiner's Philip Klein points out he has only succeeded in putting the finishing touches on destroying the Tea Party.
The Tea Party was many things to many people, but one way in which it briefly changed politics is that for a period of time, Republican lawmakers were more worried about the consequences of rubber stamping budget deals than they were about being attacked for spending cuts. Though the movement never consolidated control of the government before its influence declined, it had one lasting victory in the form of the 2011 budget agreement to resolve the debt ceiling standoff that modestly restrained spending.
Yet as time went on and Trump was elected president, Republicans decided to stop pretending to care about the debt. They voted several times to blow past spending limits, and now have done so to the tune of another $340 billion. As Manhattan Institute’s Brian Riedl notes, the latest deal “would essentially repeal the final two years of the 2011 Budget Control Act and raise the baseline for future discretionary spending by nearly $2 trillion over the decade.”
The economic future of the country is darkening considerably. And this time, Republicans and those who call themselves "conservative" are as much to blame as any radical liberal out there.