On Thursday, Americans got their first look at the president’s long-anticipated tax plan with the release of the “Tax Cuts and Jobs Act.”
Not surprisingly, most Democrats have pledged to oppose the plan, finding fault with everything from the reduction in corporate rates to the idea that changes to the mortgage interest deduction might disproportionately impact large urban areas.
{mosads}Much of the debate in the coming weeks is likely to take the form of partisan posturing, but at its core lie fundamentally different views on what tax policy should aim to accomplish.
One area where there isn’t a fundamental difference of opinion is over whether we should care about how the plan will impact deficits and debt.
Some Republicans have balked at the idea of adding to the deficit, and Democrats have recently rediscovered their long-lost fiscally conservative wing after a near-doubling of the national debt on their watch.
But while politicians on both sides have strong feelings about the deficit, most have precious little to say about the spending that is responsible for the problem.
The Committee for a Responsible Federal Budget has called the tax plan a “a step backwards for fiscal responsibility,” citing what it called “gimmicks” and a $1.5-trillion revenue cut to the federal government.
Of course, the administration and the plan’s supporters in Congress insist that the changes to the tax code will spur more than enough economic growth to raise revenues and make up for the deficit hole. But if history is our guide, economic growth alone is unlikely to be enough to calm the worries of fiscal conservatives like me.
These issues should surprise no one — especially after the $1.5-trillion budget Congress recently passed as a starting point to kickstart “reconciliation” and pass the tax package. But they are troubling to those of us who see that the lasting legacy of the Trump presidency is risking becoming one of spiraling debt.
The $20-trillion debt and soon-to-be trillion-dollar annual deficits did not arise out of nowhere, and they are not a result of too little revenue, which is currently near its long-term average.
Majorities on both sides of the aisle prefer to ignore the inconvenient truth that the federal government spends too much and, to date, has no real plan for reining things in before major programs become insolvent and the economy faces strain or even crisis.
Congressional leaders have twisted themselves in knots over the last few weeks trying to find enough “pay-fors” for the tax plan, and it remains to be seen whether the liability that remains is enough to sink the package entirely. But things need not be so dire if Republicans were willing to do the things they claim to support on the stump.
Other countries have effectively managed their deficits and debt by meaningfully restraining the major drivers of their spending. Occasional fiscal responsibility has happened in the United States as well. Imperfect as it was, the Budget Control Act effectively pulled down discretionary spending from all-time highs in the early Obama years.
The latest tax plan is encouraging in many ways for the broader fiscally conservative community. It’s chock full of long-overdue reforms that will save most of us time and money.
But debt and overspending can only be ignored for so long, and there are plenty of better, more impactful options that could be on the table if only political fortitude existed to tackle the root of the problem.
Whether by extending the Budget Control Act past its scheduled expiration, implementing a Swiss-style debt brake or some combination of available options, we can — we must — target all of the budget and ultimately decrease the incentives for politicians to raise taxes in the first place.
Jonathan Bydlak is the founder and president of the Coalition to Reduce Spending, an advocate for lower federal spending, and the creator of SpendingTracker.org. A fiscal policy expert, he also served as director of fundraising on Ron Paul’s 2008 presidential campaign. Follow him on Twitter @jbydlak and @Reduce_Spending.