Deficit hawks are dead, and few in Wash­ing­ton can muster any out­rage

The Washington Post Sunday - - POLITICS & THE NATION - @PKCapi­tol PAUL KANE paul.kane@wash­post.com

The deficit hawks are dead.

Their demise tech­ni­cally came Tues­day when the Con­gres­sional Bud­get Of­fice cal­cu­lated the fed­eral deficit at $895 bil­lion for the first 11 months of fis­cal 2018 — a stun­ning gap that was met with a col­lec­tive shrug on Capi­tol Hill.

But the real death of the deficit hawks came late last year and early this year, as Repub­li­cans such as House Speaker Paul D. Ryan (Wis.) who had railed against deficits in the first years of the Obama ad­min­is­tra­tion pushed through a mas­sive tax cut de­spite CBO pro­jec­tions of a surge in fed­eral bor­row­ing.

Given pos­si­ble high ground on the is­sue, Democrats have largely fielded a crop of can­di­dates across the na­tion who have ig­nored, played down or out­right re­jected the sig­nif­i­cance of the still-grow­ing deficits.

The Democrats have, across all fac­tions of their party, lam­basted the Repub­li­can tax-cut leg­is­la­tion of De­cem­ber and the $1.5 tril­lion short­fall it is es­ti­mated to leave in the bud­get over the next decade. But they have not at­tacked that as money that should go to the U.S. trea­sury to pay down the over­all $21 tril­lion debt. Rather, they have al­most uni­ver­sally pledged that the money be used for other fed­eral spend­ing, such as in­fra­struc­ture or an ex­pan­sion of the Af­ford­able Care Act.

That’s a far cry from 2006, when House Democrats marched to­ward a de­ci­sive midterm vic­tory that thrust them into the ma­jor­ity. Then, their numbers were pop­u­lated by fis­cal con­ser­va­tives in South­ern and ru­ral dis­tricts who pledged to cut the deficit, as well as an­ti­war lib­er­als who wanted to bring troops home from Iraq at a time when the war was cost­ing more than $100 bil­lion a year.

Some Democrats from that era ac­knowl­edge that the is­sue sim­ply does not have as much res­o­nance now, in large part be­cause of the eco­nomic col­lapse that went into mo­tion 10 years ago this week and the wage stag­na­tion that fol­lowed years there­after.

“When they write the his­tory of this time, the fi­nan­cial col­lapse and the Great Re­ces­sion is go­ing to be the defin­ing mo­ment that changed the pol­i­tics around a lot of th­ese is­sues, around things like deficits,” said Rep. Joe Court­ney (D-Conn.), a mem­ber of the 2006 Demo­cratic class.

Rather than worry about surg­ing deficits, Democrats are push­ing for ways to boost ev­ery­day life for work­ing Amer­i­cans, Court­ney said. “That eco­nomic fragility that peo­ple felt in the wake of the Great Re­ces­sion has kind of over­taken the fis­cal-hawk sort of pri­or­i­ties,” he said.

With Democrats not fo­cus­ing on the is­sue, Repub­li­cans have been given a free ride with vot­ers. A June sur­vey by the Pew Re­search Cen­ter found a re­mark­able data point: Vot­ers trust Repub­li­cans over Democrats, 41 per­cent to 35 per­cent, to do a bet­ter job with deficits.

In April, just 14 per­cent of Amer­i­cans cited the deficit as the most im­por­tant is­sue, ac­cord­ing to the Kaiser Health Track­ing Poll. Deficits trailed the econ­omy (25 per­cent), health care (24 per­cent), gun is­sues (23 per­cent) and im­mi­gra­tion (17 per­cent).

Ryan, a one­time preacher about the evil of debt, now brushes aside any ques­tions about how an­nual deficits rock­eted un­der his watch — from about $430 bil­lion in 2015, when he took the gavel, to al­most $1 tril­lion as he heads for the exit three years later.

“Rev­enues are up. The prob­lem is a pre­dictable one — it is spend­ing,” Ryan said in a farewell event with Wis­con­sin news me­dia Wed­nes­day at the Capi­tol. He pinned the blame on Medi­care and So­cial Se­cu­rity costs.

“It is baby boomers re­tir­ing, a coun­try not pre­pared for it,” Ryan said. “It’s health in­fla­tion, and it’s the en­ti­tle­ment pro­grams.”

This out­rages the deficit hawks, most of whom have long since re­tired.

“His­tory will show you there’s no coun­try in his­tory that’s been strong and free and bank­rupt,” John Tan­ner (D-Tenn.), a co­founder of the Blue Dog Coali­tion who re­tired in 2010, told The Wash­ing­ton Post’s Erica Werner.

If Democrats re­take the House in Novem­ber’s midterms, it will be the first time in more than 70 years the ma­jor­ity has flipped with­out deficits or gov­ern­ment over­reach play­ing some key role in cre­at­ing the back­lash to the party in power.

In 1994, when Repub­li­cans won the House ma­jor­ity for the first time in 40 years, Newt Gin­grich’s troops cam­paigned against the emerg­ing Clin­ton ad­min­is­tra­tion health-care plan, panned as “Hil­larycare” for first lady Hil­lary Clin­ton, even though it never even got a vote in Congress. Once in power, Gin­grich (R-Ga.) led a fis­cal stand­off over a bid to save $270 bil­lion from Medi­care, end­ing in a gov­ern­ment shut­down around the 1995 hol­i­days.

The 2006 switch came as a re­ac­tion to the war. Dozens of Blue Dog Democrats, as the fis­cal con­ser­va­tives were known, went on to im­pose a House rule known as “paygo,” a briefly held statute re­quir­ing off­set­ting cuts to any new spend­ing.

And in 2010, as John A. Boehner’s House GOP roared back to the ma­jor­ity, Repub­li­cans cam­paigned against the ACA as a pricey gov­ern­ment takeover of the health-care sys­tem at a time of bal­loon­ing deficits. Most of the Demo­cratic losers came from the Blue Dog cau­cus, dras­ti­cally shrink­ing its in­flu­ence.

Through­out 2011 and 2012, Speaker Boehner (R-Ohio) staged sev­eral fis­cal showdowns with Pres­i­dent Barack Obama that led to some mod­est deficit re­duc­tion, through spend­ing caps on an­nual fed­eral agency bud­gets and higher taxes on fam­i­lies with more than $400,000 in in­come.

Those deals were es­sen­tially scut­tled by the De­cem­ber pas­sage of the tax cuts and a sub­se­quent bud­get blue­print that was a bi­par­ti­san binge for the House and Se­nate appropriations com­mit­tees, which set de­fense and do­mes­tic agency spend­ing.

If you want to rein in the debt, do not bother the ap­pro­pri­a­tors. “If you want to deal with deficits, you’re go­ing to have to deal with en­ti­tle­ments. That’s where the spend­ing is,” said Rep. Tom Cole (R-Okla.), a se­nior mem­ber of the House Appropriations Com­mit­tee.

Some law­mak­ers pre­dict that, even­tu­ally, the fi­nan­cial mar­kets will force Congress into ac­tion.

“It’s not re­ally just can­di­dates who get to de­cide whether deficits mat­ter or not,” Court­ney said. “I think ex­ter­nal forces are go­ing to show up and change that.”

ASTRID RIECKEN/GETTY IMAGES

House Speaker Paul D. Ryan (R-Wis.) once de­cried the evil of debt but now skirts ques­tions about how deficits shot up un­der his watch.

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