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.
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.