May 27, 2018
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Republican debt concerns ring hollow after Congress passed big, unpaid-for tax cuts

Jacquelyn Martin | AP
Jacquelyn Martin | AP
The national debt is shown behind Federal Reserve Chairman Jerome Powell, left, as he makes the semiannual monetary policy report to the House Financial Services Committee in February 2018.

Updated:

Republicans in the U.S. House of Representatives are making “fiscal responsibility” a priority. They are doing this after passing a massive, unpaid-for package of tax cuts and a spending plan that will continue to balloon the federal deficit.

This is backward, and hypocritical.

If GOP House members are so worried about fiscal responsibility, they should never have passed the tax plan.

The tax code changes approved by congressional Republicans late last year will increase the deficit by at least $1.4 trillion over the coming decade, according to the Congressional Budget Office. But that didn’t stop most Republicans — many of whom have labeled themselves deficit hawks — from endorsing it. Both Sens. Susan Collins and Bruce Poliquin voted for the tax cuts and a $1.3 trillion spending plan approved in March, which was needed to keep the federal government operational.

In March, the national debt surpassed $21 trillion for the first time. This is greater than the entire annual economic output of the U.S. Although members of Congress have expressed alarm over the growing debt, President Donald Trump hasn’t paid it much attention, until now.

After inflating the deficit with a fiscally irresponsible tax plan with benefits — especially in the long term — that accrue to upper-income taxpayers, and doing so without any compelling economic rationale or any reasonable expectation of economic benefits, the GOP is now turning to spending cuts.

Earlier this year, House GOP leadership once again brought up the balanced budget amendment. Poliquin signed on to the bill during his first week in the House in 2015. In April, he called on his colleagues who “have expressed concerns about spending” to support the amendment.

“The Balanced Budget Amendment will force politicians in Washington to think more seriously about these fiscal decisions and force all members, from both political parties, to make the right decision,” he said in a press release.

Yet, concerns about “fiscal decisions” were largely absent from the Republican debate on last year’s tax cut. A balanced budget involves two sides of the ledger — spending and revenue. An amendment that restricts only spending but allows revenues to plummet without reason is foolish.

Last month, the House failed to pass the amendment, although Poliquin and all but seven of his Republican colleagues voted for it. A constitutional amendment needs two-thirds for passage.

Republicans, led by Poliquin, are now turning their attention to spending cuts. Trump has sent $15 billion worth of cuts to already approved spending, officially called rescissions, to Congress. It is the first of several expected budget-cutting packages.

Nearly half of the money would come from the Children’s Health Insurance Program, which covers about 9 million low-income children, including 18,000 in Maine. Much of the money is in a contingency fund, so it is not currently helping children. However, like a rainy day fund, the money is meant for emergencies, such as a surge in children needing coverage during a recession.

None of the clawbacks will come from the Department of Defense, which saw a funding increase in the omnibus budget, even though the Pentagon didn’t ask for it.

The rescission package is expected to pass the House where it needs only a majority of votes. Its prospects are uncertain in the Senate. Collins, a co-sponsor of the legislation creating CHIP, has already raised concerns about the proposed cuts. “One of the programs that reportedly is going to be cut is [CHIP], and that concerns me greatly,” she said Monday. “I would have to have an awfully good reason given to me, and maybe there is one,” to support taking money from the program.

There also are ongoing conversations in Congress about “entitlement reform,” the Republican term for cuts to safety net programs like Social Security and Medicare, which aren’t entitlements since recipients have paid into the systems, often for decades. Again, arguments will be made that spending on these programs must be reduced to balance the federal budget. Again, no reference will be made to the fact that budget is more out of balance now because of the recent tax cuts that weren’t paid for.

Congress should be talking about fiscal responsibility, but it shouldn’t be doing it while leaving out the revenue side of the equation and targeting only some federal spending.

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