Slashing taxes is going to cause big budget deficits. But the reason Republicans don’t really care is because they can use the resulting fiscal crisis to go after Medicare, Medicaid and Social Security.
Six weeks ago, I made a not-very-bold prediction about the true intent of the Republican’s big tax-cut plan.
“Prediction,” I wrote. “If this debt-bloating plan passes, Republicans will immediately pivot back to caterwauling about the evils of the debt.”
It turns out I was a bit off on that one. In a head-spinning feat of political gymnastics, they actually pivoted back to bemoaning the debt even before they had voted on their own plan to add up to $1.5 trillion to it.
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“Now, let’s just be honest about it,” said Sen. Orrin Hatch, R-Utah, on the Senate floor on Thursday, his lead-in signaling he was cooking up a porridge of blarney. “We’re in trouble. The country is in deep debt. You don’t help the poor by not solving the problems of debt, and you don’t help the poor by continually pushing more and more liberal programs through.”
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So … you help them by cutting taxes for corporations and the rich? Thereby adding to the debt?
Just for perspective, even the lowest estimated figure of $1 trillion more debt from the tax-cut bill is larger than the amount racked up by the American Recovery and Reinvestment Act, Obama’s economic-stimulus program back during the recession. Remember that? It caused true patriots pretending to be concerned about the national balance sheet to march in the streets.
There’s been no marching this time around. Only one GOP senator even expressed any misgivings about bloating the debt. Sen. Bob Corker, R-Tenn., said he was voting “no” because the bill would “deepen the debt burden on future generations.”
Steve Schmidt, a Republican consultant who ran Sen. John McCain’s presidential campaigns, was blunter: “Every single Gen-X’er should be outraged as we watch a bunch of septuagenarians and octogenarians load another $1.5 trillion in debt on the backs of our preteen and teenage kids. The beggaring of the country for special-interest donations is immoral.”
It was a Gen-X senator, Marco Rubio, R-Florida, who revealed what Republicans are really up to here. Putting tax cuts on the national credit card isn’t a bug in their plan. It’s the feature. The flood of additional red ink cues them up for their real goal: hamstringing the retirement programs of Medicare and Social Security.
“You have to bring spending under control,” Rubio said this past week, when asked about the tax cuts adding to the debt. “The driver of our debt is the structure of Social Security and Medicare … That will mean instituting structural changes to Social Security and Medicare for the future.”
President Donald Trump echoed this when, at a rally in Missouri, he said that after cutting taxes, Congress would pivot next to “welfare reform.”
See how this works? Spending cuts are notoriously unpopular. So Republicans are instead slashing taxes, which people tend to like except that it obviously worsens the government’s fiscal position. But then the worsened fiscal position can become the rallying cry to slash spending — on health programs like Medicare and Medicaid, and also on Social Security.
They are counting on this working even though they are now the proximate cause of the ballooning deficits.
“We estimate the legislation under consideration could bring back trillion-dollar deficits by next year,” warned the nonpartisan Committee for a Responsible Federal Budget. This year’s deficit is about $600 billion.
Trillion-dollar deficits are not a glitch, though. They’re the point.
Think about it. There’s no need for a tax cut right now. Corporate profits and stocks are at record highs. We’re at full employment, meaning the jobless rate supposedly can’t go any lower. You can make a strong case the tax system needs reform. But not a massive, deficit-busting cut.
So why do it? It rewards GOP donors. It’s a legislative “win.” The bill also contains a slew of unrequited party longings such as opening the Arctic National Wildlife Refuge for oil drilling.
But none of that is the long game. The Republican dream is to shrink or dismantle the social-safety net. It doesn’t take much of a prediction to bet that’s what’s coming next.