Debt and Deficits

Republicans Have Finally Been Revealed as the Party of Fiscal Ruin

As Paul Ryan exits, a new CBO report confirms the extent of the GOP's damage to the nation's budget.

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YURI GRIPAS/REUTERS/Newscom

Republicans in Washington have often embraced the idea of fiscal responsibility, and sought to cast themselves as the party of choice for anyone who cares about sound budgeting. This was particularly true during the Obama era, which saw dramatic increases in debt and deficits. Republicans criticized Obama's budgeting relentlessly, and promised to reverse its errors.

No Republican was more vociferously opposed to the build up of public debt than Rep. Paul Ryan, the GOP speaker of the House who announced this morning that he would not run for reelection. For years, Ryan has served as the frontman for the GOP's fiscal crusades, a role that helped elevate him into the upper echelons of party leadership.

Ryan repeatedly lambasted the fiscal policies of President Obama and the Democratic party. He charged that Obama "dodged the tough choices necessary to confront the threat of runaway federal spending," and criticized the president for ignoring the recommendations of the bipartisan fiscal commission that he helped create. Under Obama, Ryan said in a 2011 op-ed, "Democrats have simply done away with serious budgeting altogether." Ryan was serious about the deficit. Obama and the Democrats were not.

Ryan's crusade for fiscal rectitude was echoed by the rest of party leadership. The notion that the GOP was the party of fiscal responsibility was a core component of the party's self conception. The 2012 Republican party platform, for example, warned that without "dramatic action now, young Americans and their children will inherit an unprecedented legacy of enormous and unsustainable debt." It promised that the next Republican president would "propose immediate reductions in federal spending, as a down payment on the much larger task of long-range fiscal control." The end game was a balanced federal budget.

In 2012, Mitch McConnell, the top Republican in the Senate, called the debt the "the nation's most serious long-term problem." In the House, John Boehner staged multiple high-profile showdowns over raising the debt limit. The most prominent conservative activist movement of the Obama era was the Tea Party. The Tea Party was a decentralized movement with multiple motivations, but its adherents and boosters frequently cited rising government spending and resulting deficits as a key reason for its existence. During his 2016 campaign, Donald Trump ran on cutting spending and balancing the budget. His math didn't come close to adding up, but the goal was important enough to GOP orthodoxy that he repeatedly made the promise.

Republicans now control both Congress and the White House. Paul Ryan is now the top Republican in the House. Mitch McConnell is now the top Republican in the Senate. Donald Trump is the president.

So you might be forgiven for assuming that under unified Republican control, the federal government's fiscal outlook would have improved—or at the very least, that it would not have become markedly worse.

Yet since winning control of the House, the Senate, and the White House, Republicans have done nothing to shore up the budget. On the contrary, the GOP's two most prominent achievements—an overhaul of the tax code and a spending deal made with congressional Democrats—have combined to make the nation's fiscal future far worse.

The annual deficit is now racing toward $1 trillion. According to a new report from the Congressional Budget Office, over the next decade, deficits will total about $1.8 trillion more than if the tax law had not been passed. If anything, that undercounts the damage. The tax law's individual rate reductions all expire within the decade. Republicans, including Paul Ryan, have said they would like those cuts to be made permanent, and it is hard to imagine that a future Congress will really let them expire. If that were to happen, the deficit increase would balloon by a further $722 billion.

By 2028, the CBO now projects that the national debt will nearly equal the country's entire gross domestic product. The report contextualizes this figure by noting that it is an amount "far greater than the debt in any year since just after World War II." Republicans have set the debt on a trajectory that has little historical precedent.

The $1.3 trillion spending bill that congressional Republicans passed earlier, meanwhile, added $400 billion in new spending over the next two years, breaking the spending caps that were put in place under the previous administration. Its increases were roughly split between domestic and defense, and it ended up funding many Obama-era priorities. As with the temporary tax reductions, the two year increase is likely to have permanent ripple effects, as it's unlikely that Congress will suddenly return to lower spending levels.

This is the opposite of fiscal responsibility. It is, if anything, an active disdain for the sort of fiscal restraint that Republicans so often claimed to support under Obama. And it strongly suggests that the GOP's criticisms were merely opportunistic. Under Trump, Republicans have demonstrated that they are the party of fiscal ruin.

To be more precise: They have demonstrated it once again. The behavior we have witnessed under Trump is not a twist or a reversal or an unpredictable turn. It is simply how Republicans have behaved whenever they have been given the opportunity since at least the turn of the century.

Under President George W. Bush, Republicans turned a budget surplus into a bulging deficit, cutting taxes while radically increasing spending. Bush spent more than any of the six presidents before him, and nearly doubled the total spending of his predecessor, Bill Clinton. Between the 2002 and 2009 fiscal years, the federal government's discretionary spending rose 96 percent.

Democrats, to be sure, have not exactly been icons of limited government. But under Clinton, the deficit turned into a technical surplus. During his first term, discretionary spending actually dropped; it wasn't until the second term, with Republicans in control of Congress, that it began to increase again.

Deficits ballooned during President Obama's first term, and from day one of his presidency, Republicans were swift to blame Democrats for a lack of fiscal discipline. But the rapid increase actually started under Bush. Depending on how you run the numbers, it is possible to make the argument that most of the Obama-era deficits were caused by Bush-era policies. Obama's second term was marked by still large but shrinking deficits that Republicans, since taking over, have grown again. When Paul Ryan noted that Obama ignored the recommendations of the bipartisan committee on fiscal responsibility, he was right. But what Ryan didn't say was that Ryan himself was on that committee—and he voted against its recommendations.

I do not mean to suggest that Democrats are actually the party of good budgetary sense. In the long term, the largest drivers of the debt are Medicare and Social Security, and Democrats have, for the most part, been resistant to structural reforms.

But for all their bluster, Republicans have failed to move forward with significant checks to entitlement spending. Since 2000, their single biggest contribution was to the entitlement state was to expand Medicare with a prescription drug benefit. In 2012, one of Mitt Romney's most frequent criticisms of Obamacare was that it cut Medicare. President Trump, meanwhile, has made the hands-off commitment explicit, promising over and over again not to touch entitlements. Trump's position was just an admission of the position that Republicans, practically speaking, already held.

The deficit estimates that have accompanied tax law and the spending deal do not suggest that the GOP under Trump has not undergone some unexpected personality shift. Even if some members would have preferred a different outcome, the effect of unified Republican rule has been to confirm the party's true priorities. Paul Ryan, for example, is not disappointed by the course the party has taken during his tenure. "I will leave incredibly proud of what we have accomplished," he said this morning, citing the deficit-hiking tax law as a "lasting victory." This is the GOP's essential nature. Republicans didn't lose the mantle of fiscal responsibility. They never had it in the first place.