Deficit com­pli­cates mar­riage be­tween Trump, GOP law­mak­ers

Kuwait Times - - INTERNATIONAL -

WASH­ING­TON: Pres­i­dent-elect Don­ald Trump prom­ises big tax cuts, a bor­der wall and mas­sive spend­ing on in­fra­struc­ture. That’s a recipe for big­ger deficits that con­ser­va­tive fis­cally-minded Repub­li­cans have railed against dur­ing Pres­i­dent Barack Obama’s ten­ure. Trump’s agenda runs counter to years of prom­ises by con­gres­sional Repub­li­cans to try to bal­ance the fed­eral bud­get.

It’s a mar­riage of con­flict­ing pri­or­i­ties on the bud­get at least - and that means that nei­ther part­ner will get ev­ery­thing their own way. Trump’s tax cut, es­ti­mated to cost al­most $5 tril­lion over 10 years, looks sure to be pared way back. Top law­mak­ers like House Ways and Means Com­mit­tee Chair­man Kevin Brady, R-Texas, and No. 3 Se­nate Repub­li­can John Thune of South Dakota say the GOP’s tax plans shouldn’t add to the deficit. That would mean tax rates couldn’t be cut nearly as sharply as Trump wants.

“We know we’re go­ing to have to pay for this,” said Sen. John Cornyn of Texas, the No 2 Se­nate Repub­li­can. “The ques­tion is whether we do it now or whether we send it to our kids and grand­kids and make them pay for it. So that’s an im­por­tant point that we need to achieve some con­sen­sus on.” On the spend­ing side of the ledger, Trump’s prom­ises of a huge in­fra­struc­ture plan are al­ready run­ning into dif­fi­culty with Repub­li­cans. “We are not go­ing to vote for any­thing that in­creases the na­tional debt,” said Rep. Raul Labrador, R-Idaho. “Fis­cal con­ser­va­tives in the House are not go­ing to sup­port any­thing that is not paid for.”

The flip side in­volves long­stand­ing prom­ises by Capitol Hill Repub­li­cans to bal­ance the bud­get by re­peal­ing the Af­ford­able Care Act, sharply cut­ting so­cial pro­grams like Medi­care, Med­i­caid, food stamps and stu­dent loan sub­si­dies. Trump prom­ises to re­place the so-called “Oba­macare” and as­sured vot­ers dur­ing the cam­paign that he wouldn’t cut So­cial Se­cu­rity and Medi­care - and he’s on record as say­ing that 2012 GOP nom­i­nee Mitt Rom­ney’s choice of now-Speaker Paul Ryan, R-Wis., “was the end of the cam­paign.”

“I said, ‘You’ve got to be kid­ding’ be­cause he rep­re­sented cut­ting en­ti­tle­ments, etc., etc. The only one that’s not go­ing to cut is me,” Trump said at a Fe­bru­ary cam­paign stop. Ma­jor re­forms re­quire pres­i­den­tial lead­er­ship - and as a can­di­date Trump didn’t show much in­ter­est in at­tack­ing the bud­get. “It’s clear that deficits and spend­ing re­trench­ment and en­ti­tle­ment re­form was not what this elec­tion was about,” said Neil Bradley, a for­mer top House GOP aide who is skep­ti­cal of the party’s abil­ity to de­liver ma­jor spend­ing cuts.

The deficit, said Sen. Roy Blunt, R-Mo., “wasn’t talked about in the cam­paign.” The math is also daunt­ing. The most re­cent House GOP bud­get plan, for in­stance, promised to bal­ance the bud­get over a decade by cut­ting spend­ing by $6.5 tril­lion - roughly 13 cents of ev­ery dol­lar spent - over the next 10 years. But their bud­get plans have kept So­cial Se­cu­rity, the Pen­tagon, vet­er­ans pro­grams and in­ter­est pay­ments im­mune from cuts, so they’ve dou­bled down on cuts to the Med­i­caid health pro­gram for the poor and dis­abled, along with cuts to do­mes­tic pro­grams like ed­u­ca­tion, farm sub­si­dies, hous­ing vouch­ers and sci­en­tific re­search.

Re­cently, how­ever, the fo­cus in Wash­ing­ton has been to re­verse cuts to the Pen­tagon and do­mes­tic agen­cies im­posed by a 2011 bud­get deal. Along the way, Obama and top Repub­li­cans sought modest cuts to the fed­eral crop in­sur­ance pro­gram and the gen­er­ous mil­i­tary pen­sions paid to vet­er­ans in their 40s and 50s - only to have to re­verse course af­ter bi­par­ti­san squeal­ing from rank-and-file law­mak­ers. Given the in­abil­ity to pre­serve such tiny spend­ing cuts in re­cent years, one couldn’t be faulted for doubt­ing whether law­mak­ers could stom­ach the far, far larger cuts de­manded by Ryan’s bal­anced bud­get plans.

One op­tion for both spend­ing and taxes is to en­act a one-time tax break on over­seas prof­its that multi­na­tional cor­po­ra­tions “repa­tri­ate” back to the United States. That could pro­duce $100 bil­lion or so over 10 years by some es­ti­mates and the wind­fall is be­ing eyed for both an in­fra­struc­ture pack­age and a tax re­form bill. “I think the American peo­ple will sup­port spend­ing when they get some­thing con­crete and tan­gi­ble for our ef­forts,” said Sen. Roger Wicker, R-Miss. “There is a feel­ing that there’s enough money there to pay for a big in­fra­struc­ture pro­gram to get the econ­omy go­ing again and pay for stuff and also use part of the repa­tri­a­tion as a way to fi­nance tax re­form.”

WASH­ING­TON: The US Capitol dome is seen at sun­set on Capitol Hill in Wash­ing­ton. — AP

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