WASHINGTON – Senate Republican Leader Mitch “Root-‘n-Branch’’ McConnell is no longer scraping the bottom of the political barrel. No, it appears our boy from Louisville has broken through the bottom of said barrel and is in the process of digging his way through to China.
Just how low can Mitch go? Wait and see.
You may remember, apparently Mitch doesn’t, that the Congressional Budget Office warned that the completely unnecessary tax cut approved by the Republican Congress and signed by President “Tiny’’ Trump last December, titled the Tax Cuts and Jobs Act of 2017, was going to blow a hole in the federal budget as big as the Milky Way galaxy.
Specifically, the CBO determined in advance of the vote that the measure would increase the projected federal deficit by $1.9 trillion from 2018 through 2028. The official congressional scorekeeper maintained that the federal government would run a deficit of about $804 billion during the 2018 fiscal year, with deficits generally increasing in the following years, pushing debt held by the public to nearly $29 trillion by 2028.
By the way, that’s trillion with a T.
To which McConnell, that great economist, replied fiddlesticks! In fact, Mitch’s careful analysis found that the tax cut measure he so cutely embraced might even reduce the already humongous deficit through, well, magic.
“I not only don’t think it will increase the deficit, I think it will be beyond revenue-neutral,’’ McConnell told reporters at the time of passage. “In other words, I think it will produce more than enough to fill that gap.”
Well, the totals are in and it appears McConnell’s prediction fell short by about, oh, $164 billion.
Overall, according to the Treasury Department, the federal budget deficit for FY 2018 increased by 17 percent over 2017 – the largest one-year jump since the Great Recession year of 2009 – to $779 billion, representing 3.9 percent of the nation’s gross domestic product. That figure is stunning since it comes at a time when the economy is flourishing and unemployment has dipped below 4 percent, two indicators that usually show a deficit ebbing instead of growing.
That astounding $779 billion FY 2018 deficit is almost twice the $440 billion the Trump Administration anticipated. Given all that, should the economy slump, which it eventually will, the situation could turn terribly bleak, given that the government generally has to borrow more money – thus piling up more debt – in order to keep things moving.
As a bit of a sidelight, the Treasury Department originally maintained as a result of its fiscal policies that the budget would be balanced by 2028. But the CBO is now claiming, now, the FY 2028 deficit should reach $1.5 trillion, give or take.
Add everything together and you find the tax cut cost the Treasury about $164 billion in FY 2018, and it would have been worse if the Tax Cuts and Jobs Act of 2017 had been implemented for the entire fiscal year. But, hey, we all make mistakes, what’s a trillion dollars or so among friends? With Mitch at the helm, we’ll just go back, fix this thing up and return to our merry spending ways.
And, in fact, McConnell would really, really like to get things back on an even keel – by stealing money from the elderly and the poor.
Say what?
In an interview with Bloomsburg News this week, McConnell acknowledged that the growing deficit is “very disturbing’’ but rejected any notion that the $164 billion lost to the federal coffers as a result of the tax cut had anything to do with it. Nope, those terrible New Deal and Great Society programs – Social Security, Medicaid, and Medicare, derisively referred to as entitlements – are what’s carrying this nation to perdition and we ought to do something about them.
Alas, it appears other members of the Senate, Republicans and Democrats, don’t have the resolve Mitch is displaying to get the job done.
“I think it’s pretty safe to say that entitlement changes, which is the real driver of the debt by any objective standard, may well be difficult if not impossible to achieve when you have unified government,” McConnell said.
So let’s lay this out. According to Mitch, the $164 billion lost to the Treasury, a result of the sainted tax cut, had nothing to do with the hike in the deficit. Nope, it was old people collecting Social Security and going on Medicare and poor folks on Medicaid.
Are there no prisons? And the Union workhouses. Are they still in operation? If they would rather die, they had better do it, and decrease the surplus population.
Really, the numbers conclude that the tax cuts contributed to the deficit, along with a surge in federal spending, primarily on defense, and an increase in interest payments on the existing debt, owing to the Federal Reserve raising rates to battle inflation. Rather than address anything like that, McConnell admitted that he prefers picking the pockets of those with very little in their pockets to pick.
The idea here is very simple – protect a failed policy and avoid responsibility for a looming catastrophe by blaming someone or something unrelated to the whole mess, thus diverting the attention of the voters. It’s the Wizard of Oz defense – pay no attention to that man behind the curtain. “Tiny’’ has become an expert on that particular communications strategy and ol’ Root-‘n-Branch is a willing disciple.
Social Security and Medicare certainly have little to do with this. Those programs are paid for through the FICA tax that comes out of everyone’s pay slip. In fact, the Social Security Trust Fund is running a surplus — $44 billion in FY 2017 alone.
The federal government is currently borrowing money from Social Security and Medicare to pay for other governmental programs. McConnell wants to get his grimy meat hooks on those coffers for one reason – raising the eligibility age for future beneficiaries would continue to bring money in but the pay-outs would decrease, meaning the Treasury’s obligation to repay the two programs for the money borrowed would drop.
Meanwhile, Medicaid is, no doubt, an expensive program. But some of the costs are offset by the states. What’s the alternative, allowing poor people to go without healthcare? It’s certainly a worthier program than the lousy tax cut Mitch and the boys passed that primarily accrued to the benefit of corporations and the already wealthy as opposed to, say, the hourly worker.
Given all that, one might think that, rather than bust the elderly and the poor, lawmakers might want to consider pouring additional funds into the government coffers. Guess again. There is talk, during a lame duck session after the November election, of considering another tax cut, already passed by the House, that would cut revenues by another $630 billion over the next 10 years.
It makes no sense and could provoke dire consequences for the future of the economy.
So don’t be surprised if Mitch pushes it through.
The NKyTribune’s Washington columnist Bill Straub served 11 years as the Frankfort Bureau chief for The Kentucky Post. He also is the former White House/political correspondent for Scripps Howard News Service. A member of the Kentucky Journalism Hall of Fame, he currently resides in Silver Spring, Maryland, and writes frequently about the federal government and politics. Email him at williamgstraub@gmail.com.
