Who’d have thought 10 years ago that Paul Ryan, the young and energetic warrior wonk proselytizing about the danger of budget deficits and the national debt, would be leaving office in 2019 having overseen one of the largest deficit increases in history?
Pretty much nobody.
Ryan spent most of his young career shouting from the rooftops of Capitol Hill that runaway deficits and debt were going to ruin the country.
When Republicans used that message and backlash to Obamacare to take over the House majority, he was put in charge of the Budget Committee and made a series of sleek videos pushing the convincing argument that the size of the debt would spell the end of the US economy. Bipartisan panels and commissions have made recommendations that offer variations on this theme.
The two-track solution Ryan and Republicans have sold is to reform the tax code to stimulate growth by giving corporations more money and also to cut spending on programs like Medicare.
Armed with a Republican president in Donald Trump and majorities in both houses, Ryan and the GOP got the easy part – cutting taxes – done.
But that’s only made the problem worse. The federal deficit is up 17% to $779 billion for the fiscal year, the most since 2012, when Ryan was the GOP candidate for vice president and Republicans were threatening to send the US off a fiscal cliff if spending wasn’t brought under control. The national debt, by the way, is well on its way to $22 trillion. With a T.
This year, under Trump, Republicans and Democrats found a sneaky way to raise the US debt ceiling without acknowledging the size of the debt. The new debt ceiling is whatever the national debt is in March of 2019. Far from facing the debt, as Ryan said for years Americans must, lawmakers swept it under the rug.
Yes, revenues are up with the new tax law. They’re up 0.4%. But they’d be up under almost any scenario, because the economy has been booming.
So Ryan, whose promise was to fix the nation’s finances and put the US on a “Path to Prosperity,” will go off to spend time with his family and (probably) make a ton of money in the private sector, with the nation’s balance sheet further out of whack than he found it.
CBS News’ John Dickerson pointed out to Ryan that if he were in the minority, he’d be using this very issue against Democrats.
“If this were a situation where you were trying to regain control of the House, you would be talking about the deficit from beginning to end of your speeches. But now you’re on the hook for it,” Dickerson told the Speaker.
“Revenues are up this year,” was Ryan’s answer. “Believe it or not, we cut taxes at the beginning of the year, and we have higher revenues this year. Why do we have higher revenues? Because we have faster economic growth, higher wages, more taxes are coming into the government,” he said.
Dickerson pointed out that accounting for inflation and leftover revenue from the old, higher tax rates, and just general population growth means the government isn’t bringing in what the government needs or what Republicans promised with the tax law.
Ryan stayed on message. “Let me just say it this way. We cut taxes and we have higher revenues coming into the government today still,” he said.
If you want a good explanation, featuring loaves of bread, of why Ryan’s argument isn’t telling the whole story, Jim Tankersley simplifies things in The New York Times. (Also see what CNN’s Lydia DePillis had to say on the topic).
Hypocritical? Undoubtedly. Surprising? Absolutely not. Neither is the recent concern of Democrats like Rep. Nancy Pelosi, who wants back the speaker job Ryan is vacating, or Sen. Chuck Schumer, who has also adopted concern about deficits in the home stretch to election day as they attack the tax law.
Senate Majority Leader Mitch McConnell said earlier this week the deficit problem is not the fault of Republicans or the tax law, but rather Medicare. That’s a statement Democrats seized upon.
Trump on Wednesday spitballed the idea of an across-the-board 5% spending cut for all federal agencies. Across-the-board, sequestration cuts were put in place under Obama and then-House Speaker John Boehner as an act of self-flagellation to get them to agree to a larger and more sweeping budget deal. It didn’t work.
US fiscal policy under both parties of the post-World War II generations is marked by a general cycle of increased spending, expensive benefits passed by both parties, periods of alarm, attempts to do the hard work of fixing the problem and then finding ways around those attempts.
For instance – and this is the kind of ironic plot twist only real on Capitol Hill – both parties have now used the device called “budget reconciliation” to pass legislation that exploded deficits in the past ten years.
Budget reconciliation, you say? What is that?
It’s the Reagan-era system put in place to force Congress to balance its checkbook. Put another way, recent Congresses (See: Republicans’ tax bill and Democrats’ health bill) have found a way to pass bills that increase deficits using the very thing earlier Congresses devised to keep deficits in check.
Every recent President has had their deficit-increasing projects. Trump’s got his tax cuts, which so far have meant the government will bring in less money than it otherwise would have. He’d also like to upgrade the nation’s infrastructure and build his border wall, both of which will cost billions.