Why you should care
Because there’s a debt crisis coming, but no one cares right now.
You don’t hear much from the fiscal conservatives anymore. In fact, you didn’t hear from them at all as the U.S. House breezed through a bill on Thursday to raise spending by $320 billion over the next two years and lift the debt ceiling for two years.
In an hour of floor debate before the surprisingly drama-free vote, not one person spoke against the bill, even though 149 souls (including about two-thirds of the Republican caucus) voted against it. Why? Well, President Trump was for it, so why make a fuss, and don’t we all want to talk about Robert Mueller instead?
It would be easy to say Trump has flipped the Republican Party he now owns on its head by handing out piles of cash like Santa Claus and not caring about deficits. But this is a tradition. The debt soared during the Reagan–Bush years, from 31 percent of the gross domestic product in 1981 to 64 percent in 1993. George W. Bush created a new entitlement program (Medicare’s prescription drug benefit), not to mention the trillions spent on wars.
What’s dribbling out now is the real belt-tightening that begins in 2021, if and when Trump wins a second term.
The Bush spending was a major talking point in the Tea Party era, which boiled over 10 years ago this summer with the dramatic showdowns between lawmakers and constituents pissed off about Obamacare (and bank bailouts, the stimulus law, the sputtering economy and so on). It was the kind of groundswell Democrats hoped for — but have not yet achieved — with impeachment.
Many of the House Republicans who voted no on Thursday, and the senators who will vote no this coming week as this agreement almost certainly glides into law, were elected with a pledge to bring fiscal rectitude at last.
Problem was, that groundswell was more about a burn-it-down attitude than fiscal conservatism. That’s why instead of Paul Ryan’s Medicare reforms, we now have Trump, who got here by promising to be a wrecking ball against convention but not take away your benefits.
It worked, and it’s resulted in this strange zigzag when it comes to Trump budgets. He’s proposed major cuts across all sorts of agencies (the Pentagon was always spared), but it seems to come more from the brain of now chief of staff Mick Mulvaney, a member of that Tea Party class of 2010 in Congress. And no one wants to touch the major source of the future red ink that number crunchers worry will be catastrophic for the U.S. economy before long — health care costs and other payouts to seniors.
We fretted in this space a few weeks ago about a debt ceiling blowup to come this year, but we undersold the political benefits to pretty much everyone of doing this nice and quietly, slipping it underneath the Mueller-related bellowing.
The Washington Post reported a revealing anecdote recently, that Trump has been telling aides some advice he got from Senate Majority Leader Mitch McConnell, summed up as: “no politician had ever lost office for spending more money.” And they’re about to spend a lot more, though the specifics will come from later appropriations bills. This deal adds a projected $1.7 trillion to the national debt over the next decade, according to the Committee for a Responsible Federal Budget. But that’s someone else’s problem. Republicans want to keep the economy humming for the next year, and more money (and certainty) helps.
In a practical sense, Democrats get what they want out of this deal — more spending and a permanent end to the strict budget caps known as “the sequester” that were the unholy love child of the last debt ceiling crisis in 2011. But it could well be a strategic blunder. As Democratic strategist (and former top Senate aide) Adam Jentleson has pointed out, this sets up a debt ceiling crisis for a potential Democratic president in the summer of 2021. Because Republicans tend to find religion on spending when they’re out of power, they could force a debt ceiling showdown that could torpedo the first-year plans of a President Marianne Williamson or whoever.
Of course, that’s not what the White House is counting on.
In fact, what’s dribbling out now is the real belt-tightening that begins in 2021, if and when Trump wins a second term and has more Republicans by his side in Congress. It’s exactly the scenario he had in 2017. The chief legislative accomplishment under unified GOP control? A major tax cut that, you guessed it, substantially increased the national debt.
In fact, Trump signed it into law three days before Christmas 2017. Ho, ho, ho.