Trump’s White House: ‘We Need Deficits’

JM Ashby
Written by JM Ashby

Before he became the White House budget director, Mick Mulvaney was one of the biggest deficit hawks in Congress and a founder of the arch-conservative Freedom Caucus. On multiple occasions during his time in Congress, Mulvaney threatened to shut down the federal government and even blow up the debt ceiling if significant deficit reduction wasn't tied to both.

But that was then. Now, Mick Mulvaney says, we "need deficits" for growth.

White House Budget Director Mick Mulvaney is signaling similar flexibility, saying on CNN Sunday that decisions about deductions remain up in the air as “the bill is not finished yet.” He took it a step further, by adding that a tax plan that doesn’t add to the deficit won’t spur growth.

“I’ve been very candid about this. We need to have new deficits because of that. We need to have the growth,” Mulvaney said. “If we simply look at this as being deficit-neutral, you’re never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth.

Treasury Secretary Steve Mnuchin recently made the fantastical claim that Trump's $5 trillion tax cut bill will actually reduce the deficit so it certainly appears that not every member of the Trump regime is on the same page. Mnuchin's claim, if it were true, would be a bad thing according to Mulvaney.

The Republican strategy for passing "tax reform" is to say anything, so it's not necessarily surprising that members of Trump's cabinet of now making contradictory statements just days apart from each other.

But contradictions aside, even if you buy Mulvaney's argument that we "need new deficits" to spur economic growth, there's another problem with that.

The problem is we've already hit 3 percent growth. The economy expanded at an annual rate of 3 percent during the second quarter of this year, but it also expanded at a rate of 3 percent at different points over the past 8 years while President Obama was in office. The economy has expanded at that rate in recent years without passing $5 trillion in tax cuts that will bankrupt the nation.

The economy has also continued to expand at that rate without moving away from an Obama budget. As of today, the federal government is being funded by a continuing resolution that extended the budget for fiscal 2017, but fiscal 2017 was also a continuation of the previous fiscal year. Federal spending has been more or less static since 2015.

It's true that our economy has not expanded at that rate in every single quarter of every recent year, but that's probably not possible. Factors beyond our tax code, such as the crushing winter weather of 2014 and 2015, can limit economic growth, and I would be fairly surprised if Hurricanes Harvey and Irma are not reflected in the third quarter of this year. The so-called "retail apocalypse" is also going to catch up with us at some point soon.

  • mnpollio

    This seems to be the long-standing 40+-year logic for Repugs. If a Democrat is in the White House, then deficits are bad bad bad, and the president should not be allowed any leeway to help or do anything in any other arena until the deficit issue is solved. If a Republican gets in the White House, then suddenly deficits don’t matter…at all…nothing to see here. The Chicken Littles suddenly go mute.

  • ninjaf

    I really would like to see us have a legitimate party of opposition. It makes our country stronger. And the Republicans have abdicated in exchange for perpetual power. Gaining and retaining power is all that matters to Republicans anymore.

  • Aynwrong


    Hypocrisy is the only ideology that the GOP consistently adheres too.

    We need new deficits to achieve growth, but we also need tax cuts to spur the economy which will naturally pay for themselves which will prevent deficit spending but we need new deficits. Wait, what?!?


  • David Greenberg

    No shit Sherlock. The poster boy for hypocrisy. It seems the requirement for being a conservative is being amoral without a shred of decency and the ability to look people in the face and swear that up is down. And 63 million voters in this country are so overcome with racism and dog whistles, that they think this is good, despite the fact that they are being screwed to the wall. I’m reaching for my Valium.

    • ninjaf

      Hope you brought enough Valium to share with the class, please.