Congress

Senate Republicans Vote to Explode the Federal Deficit

Written by SK Ashby

Senate Republicans will finally hold a vote later today on their budget resolution for fiscal 2018 that will create space for $1.5 trillion in deficit-financed tax cuts that aren't paid for.

Their proposal does call for deep spending cuts to pay for tax cuts, but most of their theoretical cuts aren't detailed in the non-binding proposal.

From the Associated Press:

The nonbinding budget plan, slated for a vote late Thursday, would set the stage for tax legislation later this year that could pass through the Senate without fear of a filibuster by Democrats — and add $1.5 trillion to the deficit over the next 10 years. [...]

Under Capitol Hill’s byzantine budget rules, the nonbinding budget resolution is supposed to lay out a long-term fiscal framework for the government. This year’s measure, for instance, calls for $473 billion in cuts from Medicare over 10 years and more than $1 trillion from Medicaid. All told, Senate Republicans would cut spending by more than $5 trillion over a decade, though they don’t attempt to spell out where the cuts would come from.

Their proposal doesn't "spell out" where the cuts will come from because it's never going to happen. Moreover, if they actually tried to spell out where the cuts will come from, they probably couldn't pass the resolution.

You may have noticed that the only cases where Republicans are actually able to pass things is when the details are nebulous. They don't usually have a great deal of trouble passing budget resolutions because they're symbolic documents that don't mean anything when the time comes to fund the federal government.

For example, it's extremely unlikely that their package of tax cuts for the rich will actually be attached to $1.5 trillion in cuts to Medicare and Medicaid. Having failed to cut Medicaid at least three times this year, there's no reason to think attaching it to huge tax cuts for the rich would enable its passage. It's more likely that doing so would doom both proposals.

The key to this budget resolution and the GOP's plans moving forward is the $1.5 trillion number. Their tax cut proposal calls for $5 trillion in tax cuts but, as I've said before, that's simply too much. It's too big. It's mathematically impractical. On the other hand, $1.5 trillion in deficit-financed tax cuts sounds more realistic and, at the end of day, I still expect that's what we'll see.

The only realistic alternative to passing $1.5 trillion in deficit-financed tax cuts is not passing anything at all.

I'd be remiss not to point out that while Senate Republicans will vote on a budget resolution for fiscal 2018 later today, we're actually already in fiscal 2018. The fiscal year began on the first of the month and the GOP budget resolution covers a period that will not begin until December. The federal government is currently funded by a continuing resolution of the fiscal 2017 budget which was more or less a continuation of fiscal 2016. Fiscal 2016 was also a continuation of fiscal 2015. And so on.

While I do expect the GOP will eventually pass tax cuts, I'm not as optimistic as they are that they'll accomplish it before the end of this year. The federal government will almost certainly be funded beyond December by yet another continuing resolution.

I see no reason to think we won't still be operating under an Obama-era budget when the midterm elections arrive.