McConnell expresses worry as deficit swells
He blames entitlements, not tax cuts
WASHINGTON — Senate Majority Leader Mitch McConnell on Tuesday called the ballooning budget deficit “very disturbing” but said large federal spending programs were to blame, dismissing criticism that the GOP’s tax-cut law is saddling the country with more debt.
McConnell, in a Bloomberg interview, also said there was little chance Republicans would be able to cut government spending next year if they retained control of Congress, as any changes would need leadership from Democrats.
“It’s disappointing, but it’s not a Republican problem,” McConnell, R-Ky., said Tuesday. “It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.”
McConnell’s comments came a day after the White House reported that the government ran a deficit of $779 billion in the fiscal year that ended Sept. 30. That’s a 17 percent increase from the year before and a 77 percent increase from the $439 billion deficit in fiscal 2015, when McConnell became majority leader. Higher spending and stagnating tax
revenue pushed the nation’s debt burden higher. Business tax revenue fell sharply in the first nine months of this year because tax rates were cut under the new law.
Three weeks before midterm elections, McConnell said tackling the mandatory spending programs like Medicare, Social Security and Medicaid could not be done by Republicans alone, suggesting it was unlikely to occur unless Democrats controlled at least one chamber of Congress.
“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 told Bloomberg.
McConnell said he had many conversations on the issue with former President Barack Obama, a Democrat.
“He was a very smart guy, understood exactly what the problem was, understood divided government was the time to do it, but didn’t want to, because it was not part of his agenda,” McConnell said.
“I think it would be safe to say that the single biggest disappointment of my time in Congress has been our failure to address the entitlement issue, and it’s a shame, because now the Democrats are promising ‘Medicare for all,”’ he said. “I mean, my gosh, we can’t sustain the Medicare we have at the rate we’re going, and that’s the height of irresponsibility.”
McConnell said the last major deal to overhaul entitlements occurred in the Ronald Reagan administration, when a Social Security package including a rise in the retirement age passed under divided government.
McConnell said he was the GOP Senate whip in 2005 when Republican President George W. Bush attempted a Social Security overhaul and couldn’t find any Democratic supporters.
“Their view was, you want to fix Social Security, you’ve got the presidency, you’ve got the White House, you’ve got the Senate, you go right ahead,” McConnell said. The effort collapsed.
The Office of Management and Budget has projected a deficit in the coming year of $1.085 trillion despite a healthy economy. The Congressional Budget Office has forecast a return to trillion-dollar deficits by fiscal 2020.
It is unusual for the deficit to grow when the economy is strong, but the White House and GOP leaders have pursued policies that increase spending and cut tax rates, as President Donald Trump has said he is trying to rev the economy to encourage more growth.
Democrats warned during the tax-cut debate that Republicans would widen the deficit through tax reductions and then seek to recoup the losses by cutting programs like Medicaid, a health care program for the poor and for low-income families, and they seized on McConnell’s comments Tuesday.
“Like clockwork, Republicans in Congress are setting in motion their plan to destroy the Medicare, Medicaid and Social Security that seniors and families rely on, just months after they exploded the deficit by $2 trillion with their tax scam for the rich,” House Minority Leader Nancy Pelosi, D-Calif., said in a statement.
Senate Minority Leader Charles Schumer of New York echoed Pelosi’s statement Tuesday, saying that McConnell and other Republicans “blew a $2 trillion hole in the federal deficit to fund a tax cut for the rich. To now suggest cutting earned middle-class programs like Medicare, Social Security and Medicaid as the only fiscally responsible solution to solve the debt problem is nothing short of gaslighting.”
Republicans spent most of the Obama administration complaining about budget deficits, but they have largely backed down during the Trump administration, supporting his proposals to raise spending and cut taxes.
The U.S. government has more than $21 trillion in debt by some measures, and the aging population, combined with rising health care costs and large debt interest payments, are projected to make the debt grow even faster in the near future.
McConnell blamed the recent acceleration in deficit spending on Medicare, Medicaid and Social Security, but there haven’t been policy changes in those programs to explain the major run-up in the debt in the past two years. The bigger changes have instead been in bipartisan agreements to remove spending caps on things like the military, as well as last year’s tax-cut legislation.
National Economic Council Director Larry Kudlow said last month that the White House planned to try to address high levels of government spending next year, but he wouldn’t offer details.
“I don’t want to be specific, I don’t want to get ahead of our own budgeting, but we’ll get there,” Kudlow said at the Economic Club of New York. “But I agree, we have to be tougher on spending.”
During the 2016 campaign, Trump vowed not to cut Medicare, Social Security or Medicaid if he became president. He has largely stuck to his promise not to cut Medicare, but he has proposed Medicaid cuts. His advisers have also sought to make cuts in Social Security disability spending.
These proposals have largely fallen flat in Congress, however, as the White House didn’t signal it planned to make any changes a priority, and lawmakers are often reticent to take on divisive political issues without presidential leadership.
“I think this issue still resonates with Republican voters and independent voters,” said
Sen. Patrick Toomey, R-Pa., who last year led an unsuccessful effort to make big changes to Medicaid during Republican attempts to repeal the Patient Protection and Affordable Care Act. “Individual candidates may well be focused on other issues, but there are many of us who still feel very strongly about this.”
As to whether Trump will be helpful going forward on that front, “it’s unclear,” Toomey said. “I think the president did indicate he was not interested in taking on big entitlement programs early on. Under the right circumstances, I think he could be an ally.”