Tax reform is slated to add more than $1.4 trillion to the deficit over the next decade
The bill adds to the deficit and debt, which concerns Republican lawmakers
It’s the GOP’s big gamble on tax reform – and it might just pay off.
New eye-popping numbers released this week show that tax reform is slated to add more than $1.4 trillion to the deficit over the next decade, adding two-thirds of that money just in the next five years. The impact on the national debt, when you factor in interest, would be even larger.
Some senators – like Bob Corker of Tennessee, James Lankford of Oklahoma and Jeff Flake of Arizona – have raised alarm bells over the potential for this to add too much to the deficit, especially if the country fails to hit projected economic benchmarks. And the conservative tea party movement that rocked the GOP just a few election cycles ago was based on the idea of fiscal responsibility.
So there you have it. The bill adds to the deficit and debt, which concerns Republican lawmakers who have put getting the debt under control at the core of their economic message for years. Why then, are Republicans not anticipating a huge political backlash for tax reform and how much does it really matter if the Republican tax plan isn’t revenue-neutral?
A new Pew Research poll released earlier this month shows Americans definitely don’t care as much as they used to care. Only 54% of Americans think the budget deficit is a “very serious” problem – down from a broad 75% in 2011 at the peak of the tea party surge. And that might end up giving Republicans the cover they need to pass the bill anyway.
That 54% number is similar to levels in years leading up to the Great Recession, according to trends from previous CBS News/New York Times polling. Strong concern over the deficit sunk down significantly among both parties as well as independents, falling the most sharply from 85% to 60% of Republicans who say it’s a “very serious” problem.
The budget deficit is the annual difference between how much the government spends and how much it takes in every year. Its debt, which tops $20 trillion, according to the US Treasury, is the total amount the federal government owes.
Concern for the budget deficit has largely mirrored the deficit itself: it currently stands at $666 billion this fiscal year – down from a high of more than a trillion dollars annually during Barack Obama’s first term but higher than its roughly $300 billion average during George W. Bush’s second term.
And the stakes are high: Republicans are looking to push their tax plan through Congress by the end of the year. A tax plan has already passed the House, and Senate leaders are trying to unite their fragile majority in support of a plan.
But Americans are also getting less optimistic about reducing the deficit at all in the near future. Only 30% now say they expect to see “significant progress reducing the federal budget deficit” over the next five years or so – that’s down from 44% who said the same thing in December 2012, according to the Pew Research Center.
Democrats were more likely to see the deficit as a very serious problem than Republicans when Bush was president, and the opposite was true when Barack Obama was president, according to CBS/NYT. Still, strong majorities in both parties were very concerned about the deficit when it ballooned in Obama’s first term. Republicans are still more concerned today.
That being said, it’s still a gamble. A broad 66% of Americans – evenly split to include 67% of Democrats, 65% of Republicans and 70% of independents – say they aren’t in favor of increasing the national deficit if it means you’ll get a tax cut, per a new NPR/PBS/Marist poll.
Another statistic that shows this tax reform plan might be worth the risk for Republicans: Tea party supporters were the most likely group to say it was worth increasing the national deficit in order to get a tax cut. Four in 10 of them said they were willing to make that trade.
But when push comes to shove, does it matter enough? Time will tell.
This Pew Research Center poll was conducted from Oct. 25-28, 2017 among 1,504 adults. The margin of error is ±2.9 percentage points for the full sample; it is larger for subgroups. This NPR/PBS/Marist poll was conducted from Nov. 13-15, 2017 among 1,019 adults. The margin of error is ±3.5 percentage points for the full sample; it is larger for subgroups.
Correction: This post has been updated to properly characterize the margin of error for subgroups in polling.