In an era of heightened partisan rancor, Republican and Democratic leaders in Washington still managed to come together in a spirit of bipartisanship this week to do that thing they do best — spend.
Party leaders in Congress and the Trump administration reached a tentative budget agreement on Monday to increase federal spending by $320 billion over two years — at a time when the federal government is already running a $1 trillion annual deficit in the midst of a booming economy. The deal would also suspend the debt ceiling until July 2021, six months after the next presidential inauguration. In other words, it would solve the immediate political problems facing Republicans and Democrats in Washington while making America’s long-term fiscal problems even worse.
The budget deal looks like the swamp at its swampiest. The Republican president is nevertheless selling it as a victory. He tweeted: “I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles E. Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy — on a two-year Budget and Debt Ceiling, with no poison pills…This was a real compromise in order to give another big victory to our Great Military and Vets!”
It is certainly true that the federal budget cannot be balanced on the back of our military. It is also true that we cannot rein in the debt and deficit merely by targeting domestic discretionary spending. Any serious plan to deal with the debt must deal with the main drivers of debt: entitlements. Brian Riedl of the Manhattan Institute, who recently crunched the latest numbers from the Congressional Budget Office, notes spending on Medicare (including interest) in 2019 will exceed Medicare premiums and payroll taxes by $366 billion, with the deficit for Medicare alone jumping to $1.13 trillion in a decade.
And what does the Republican party have to say about this looming crisis? Not much at all. It was just eight short years ago that congressional Republicans almost unanimously — in a genuine act of political courage — voted in favor of Paul Ryan’s sensible plan to reform Medicare for Americans under 55 in order to tackle the debt and avoid much more painful changes to Medicare that would be necessary during a debt crisis. Republicans held the House in 2012 but failed to unseat the incumbent Democrat in the White House. They continued to push for entitlement reform and took over the Senate in 2014. But in 2016 Trump won the nomination while promising not to touch Medicare and Social Security, and entitlement reform was a dead letter when he took office with unified Republican control of Congress. The president is now implausibly claiming he will look for big spending cuts during a second term, but his track record suggests he would do no such thing unless a crisis forced his hand.
And what does the other party have to offer? Elizabeth Warren has a plan to spend $1.25 trillion to cancel most student debt and make college free. Beto O’Rourke released a $5 trillion plan to accomplish half of the Green New Deal’s main goal. Bernie Sanders’s Medicare for All plan would cost $30 to $40 trillion, and Kamala Harris absurdly claims it can be implemented without raising middle-class taxes, indeed while cutting them.
Margaret Thatcher famously observed that the problem with socialism is that you eventually run out of other people’s money. She might add today that it’s also the problem with Republicans and Democrats.
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