Taxes

The Deficit is Already Going Up Under Trump

JM Ashby
Written by JM Ashby

White House budget director and Edgar-suit wearing lizard Mick Mulvaney has quietly notified Congress in a letter addressed to Speaker Paul Ryan that the federal deficit will increase by $250 billion between fiscal 2017 and fiscal 2018 for reasons that should (but won't) give them pause.

via Reuters:

WASHINGTON (Reuters) - The budget deficit for President Donald Trump's first two years in office will be nearly $250 billion higher than initially estimated due to a shortfall in tax collections and a mistake in projecting military healthcare costs, budget chief Mick Mulvaney reported on Friday. [...]

Individual and corporate income taxes and other collections for this year are expected to be $116 billion less than the administration anticipated in May. Tax receipts in 2018 are expected to be $140 billion less than initially estimated.

Republicans in Congress would undoubtedly say this is exactly why they need to pass "tax reform," but their solution is not to close the hole and generate a surplus; their solution is to explode the hole and possibly ignite a recession.

Tax collections are dropping and Republicans haven't even touched the tax code yet. They haven't passed sweeping "tax reform" that will see taxes on the rich cut by as much as 15 percent or more.

Even if Republicans were able to pass every spending cut they've ever dreamed of passing, it would not make up for their plans to eviscerate federal revenue. The non-partisan Tax Policy Center estimated last week that the budget proposal delivered to Congress by Mick Mulvaney (pictured above), which included heinous spending cuts, would still increase deficits by $3.5 trillion.

It may be fair to say that the deficit is currently going up under Obama-era policy because the fact is we're still operating under a federal budget that is nearly identical to every budget passed since 2015, but that would require Republicans to admit that they haven't done jack shit since sweeping into office. Furthermore, we can only use a very loose interpretation of the word "budget" here. Congress has not actually completed the appropriations process and passed a comprehensive budget since Republicans first gained control of both chambers of Congress in 2015.

An equally relevant but under-reported aspect of our current fiscal predicament is that the rich are withholding their taxes because they expect to receive a tax cut any day now.

  • muselet

    Pushing wealth upward is the point of every R economic proposal. Sure, they still trot out the Tax Cuts Raise Revenues shibboleth, but Arthur Laffer’s ridiculous line of patter is merely a smokescreen at this point.

    Expect Righties to blame the Ds—and, especially, Barack Obama—for the easily-predictable consequences of the Rs’ obsession.

    –alopecia

  • Arthur Croft

    Traitors. All of them.
    All they want to do and actually do is hurt America.

  • Which begs the question, why isn’t the MSM reporting on any of this? Because when the recession comes and it will come, particularly if Dems can’t take over the WH and Congress, the ignorant masses will blame everyone in Washington instead of just the GOP. We’ve been saying it for a long time but I’ll keep saying it unto infinity but the MSM’s focus on the flashy stories and “both siderism” is seriously failing this nation especially when it comes to reporting on the economy.

    • Aynwrong

      Well said.

  • Badgerite

    When you have to keep all factions of the ‘crazy train’ under one political tent, any kind of consistent, coherent economic or political philosophy just goes up in smoke.
    They have no “core values” anymore. And trump is a failed businessman who kept himself from personal bankruptcy by cheating other people and selling out to a foreign power.