The good news is, concerns over the state of the American economy have dropped significantly over the last eight years — from a high point of 86 percent of Americans rating the economy as the number one concern in Gallup polling from early 2009 to just 19 percent who say it’s their top concern today.
The bad news is, the Congressional Budget Office just released a report projecting that the federal deficit for fiscal year 2017 will rise to $693 billion — an increase of $134 billion since the CBO’s projection just six months ago — and a level not seen since President Obama’s first term, with its four straight years of trillion-dollar-plus deficits.
{mosads}The worse news is, the CBO projects that federal spending this year will cross the $4 trillion threshold for the first time ever. And the worst news of all is that the CBO projects that over the next 10 years, annual deficits will continue to increase, rising from 3.6 percent of gross domestic product in 2017 to 5.2 percent of GDP in 2027, growing the national debt from its current level of $19.8 trillion to more than $30 trillion by 2027.
And the question is, does anyone in the federal government care?
Democrats, being Democrats, certainly don’t seem to. They have not shown any desire or even willingness to support reducing even the rate of growth of spending, let alone reducing spending itself. In their world, apparently, there is nothing to worry about, and no reason for government to curb its appetite. To Democrats, stealing money from future generations is merely the small price of handing out government benefits to their constituents today — and future generations aren’t voting today, so deficits be damned.
Some Republicans appear to be no better than Democrats on this front. So-called “centrist” Republicans (read: the Tuesday Group and their colleagues in the Senate GOP Conference) apparently see no reason to act differently than Democrats. Their virtually unanimous opposition to the House healthcare bill, and, in the Senate, to the Senate GOP’s healthcare bill — both of which project merely slowing the rate of growth of Medicaid spending in the out years, rather than cutting Medicaid spending (as is falsely being reported by the mainstream media) — is proof positive.
So, if Democrats and a significant number of Republicans don’t see the growing deficit as a problem, what’s a good conservative to do? If there’s little appetite for reductions on the spending side of the equation, there’s only way to solve the math problem — increase receipts on the revenue side of the equation.
And that means it’s time to push hard for tax reform — the kind of tax reform that will generate the kind of economic growth needed to boost federal revenues and reduce federal outlays far more than current CBO projections suggest.
Keep in mind, the CBO projections are all based on the premise that no major policy changes occur, and that economic growth over the next decade will continue to muddle along its current 2 percent annual rate. The difference between 2 percent GDP growth and 4 percent GDP growth is $5 trillion in additional federal revenues over 10 years. That’s $500 billion per year, and that would take a significant bite out of the deficit. So we need to find a way to generate 4 percent economic growth.
Here’s where it gets tricky. Under the rules of the reconciliation procedure congressional Republicans plans to use to pass a tax reform measure through both houses without having to overcome a Democrat filibuster, any legislation must be “deficit neutral” over 10 years. That is, the CBO must project that it will not increase the deficit over current projections. Any change that failed to meet that test could be enacted, but not permanently — it would expire at the end of the tenth year.
Perhaps oddly, it’s the conservatives — who have, historically, been staunch opponents of deficits — who think that growing the economy, breaking this eight-year cycle of below 2 percent growth, is so important that if they cannot achieve their first goal of reductions in future spending growth to achieve a deficit-neutral tax reform, they are willing to temporarily increase the deficit over the 10-year budget window in order to enact the kind of significant tax reforms needed to generate 4 percent economic growth. They suggest changing the budget rules to allow for a CBO score over a longer period of time than the current 10-year window — perhaps 15 years, 20 years, or even 30 years.
They’re right. The 10-year budget window is an arbitrary rule. What is not arbitrary is our nation’s need to generate the kind of economic growth necessary to flood the federal treasury with enough revenue to pay down our debt.
Jenny Beth Martin (@JennyBethM) is president and co-founder of Tea Party Patriots.
The views expressed by contributors are their own and are not the views of The Hill.