Fiscal negligence of recent Congresses must be dealt with now

The budget deficit is projected to total almost $900 billion this year — higher than any time outside of the Great Recession — and policymakers have no one to blame but themselves.

Ordinarily, high deficits are the result of a recession or a war, but not this time. In fact, the deficit has never been this high when the economy was this strong and the country wasn’t fighting a major war. 

{mosads}Often, growing structural deficits can be attributed to the effects of an aging population and rising health-care costs on the nation’s largest spending programs, but not this year.

No, this year’s deficits are driven by fiscally irresponsible policymakers — the choices our elected officials made to cut taxes and increase spending without offsetting the cost. 

In fact, fully 60 percent of this year’s deficit is the result of legislation enacted since 2015. Think of it this way: If our leaders had simply paid for any new initiatives after 2014, this year’s deficit would be about $360 billion — low enough that debt would be declining relative to the economy. Instead, we’ll be borrowing an additional $540 billion to pay for new tax cuts and spending. 

Most of these irresponsible actions were taken by the previous Congress and signed into law by President Trump. 

In December 2017, after years of calling for revenue-neutral tax reform, Congress and the president enacted deep tax cuts on a partisan basis. Accounting for economic growth, those tax cuts will cost $228 billion this year — that’s a full quarter of this year’s deficits.

Rather than matching these tax reductions with spending restraint, Congress followed them with a massive increase in both defense and nondefense spending, enacted on a bipartisan basis in early 2018.

Those increases grew the discretionary budget by 16 percent over two years and added $186 billion to the deficit this year alone — that’s one-fifth of this year’s deficit. 

Last Congress’ fiscal record was a symptom of taking the easy path: Policymakers like to enact giveaways, whether in tax cuts or boosting spending for particular programs. Normally, Congress is able to temper its instincts with reasoned analysis: The tab must eventually be paid. 

But restraint went out the window with convenient excuses. It was promised that tax cuts pay for themselves, even though no independent analysis found the bill would.

Or defense increases were deemed too important to pay for, which is how we ended up with a 17-percent increase to base defense spending over the last two years, more than the Pentagon even asked for.

This year’s President’s Budget asks for another 5-percent increase in total defense spending on top of the previous increases, hidden in warfighting accounts. 

In reality, if something is worth doing, it’s worth paying for. Paying for a program communicates that the increase is supposed to be a lasting change, not a fleeting boost. 

This trend toward enacting giveaways without worrying about the bill really started in 2015 when Congress averted Medicare cuts, abandoning the precedent that the cost should be paid for with other health savings.

Between 2004 and 2014, that change had been paid for 98 percent of the time, but no longer. Congress followed up with another round of deficit-financing in December 2015 with $680 billion of tax cuts (largely for business).  

Although those two 2015 bills started the recent trend of abandoning fiscal discipline, accounting for about 10 percent of this year’s deficit, legislation in 2017 and 2018 climbed to a new level of irresponsibility. 

In reality, Congress needs to pay for both the short-term borrowing they have inflicted and the longer-term structural deficits they have inherited. 

A good first step is a return to pay-as-you-go budgeting. At the very least, stop the current trend of borrowing for every new policy. Especially in good economic times, there is little reason to deficit-finance.

{mossecondads}A spending deal to raise discretionary spending later this year should be paired with other spending reductions and new revenue so as not to add to the debt.

Even if lawmakers don’t make the problem any worse, they are still in a much bigger hole than they began 2017 in. We will need to enact savings.

Fortunately, there’s no shortage of ideas, whether they are new taxes on the wealthy being proposed on the campaign trail, or ideas to reduce spending on health care and prescription drugs that were proposed by both Presidents Obama and Trump.

The last two Congresses are responsible for three-fifths of this year’s deficit. It’s up to the next couple of Congresses to clean up their mess and to start governing responsibly. Otherwise, the era of $2 trillion deficits will be just around the corner.

Tyler Evilsizer is the deputy policy director for the Committee for a Responsible Federal Budget.