New projections of deficits provoke no response from Congress
by Jay Heflin | January 31, 2020 12:00 AM
New projections show a deteriorating fiscal outlook for the federal government, but Congress is not debating changing course.
A year ago, the Congressional Budget Office projected that trillion-dollar deficits would not begin until 2022. As of Tuesday, the organization sees that type of loss beginning this year, fiscal 2020.
A big reason for the change in estimates is that, late last year, Congress and the White House expedited lowering taxes while simultaneously increasing spending.
Government-funding legislation passed and signed into law last December boosted federal spending by $1.4 trillion for military and nonmilitary programs and killed revenue-raising Obamacare taxes. It also renewed expired tax breaks that alone will drain $22.3 billion from federal coffers in 2020, according to the Joint Committee on Taxation, the congressional scorekeeper for taxation.
“The [CBO] numbers make the case perfectly, which is we have big problems, and we are going to need big changes,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a group that advocates for deficit reduction. "Ideally, we would put together a plan that is big enough to address this problem and would include new revenues … and a massive rethinking of our spending programs."
Bill Gale, a senior fellow at the Brookings Institution, said that entitlement reform, such as for Medicare and Social Security, should take priority over adding a new revenue stream, such as a value-added tax or a carbon tax, which would bring more revenue to the federal government.
“I think it makes sense to pursue those opportunities vigorously … I’m not in favor of enormous fiscal rectitude right now,” he said, referring to the creation of an additional revenue stream. Gale's first choice would be entitlement reform.
Lawmakers from both political parties have indicated that the CBO’s projections are a clear sign that reforms are needed in how the federal government taxes and spends. Rep. Steve Womack, a Republican from Arkansas and the top Republican on the Budget Committee, said that the agency’s deficit projections showed an “unsustainable trajectory.”
The committee’s chairman, Rep. John Yarmuth of Kentucky, said during the panel's Wednesday hearing on the budget report that it "once again confirms that, despite the economic expansion he inherited, the fiscal outlook has worsened since President Trump took office.”
Despite all the talk, a fix is unlikely in the current political environment. “Congress and the president seem pretty unable to get much of anything done these days, so I would take a small improvement. It would be better than nothing, even just not making the situation worse,” MacGuineas said.
Lawmakers on Capitol Hill, however, appear more focused on deepening the situation by proposing ways to spend more and tax less. House Minority Leader Kevin McCarthy said on Monday that efforts are underway to produce another round of tax cuts following President Trump's comments in Davos recommending such legislation.
Poster Comment:
Looks like the spendthrifts in CONgress are driving the stake into the people's hearts.