We did it! America nearing trillion-dollar deficit this year, should run trillion-dollar deficit next year too

They say America can’t achieve big things anymore, particularly big things that require bipartisan cooperation.

But I’d call this “big.” And it really is an achievement: Imagine how terrible at basic responsible governance both of our national parties needed to be to produce trillion-dollar deficits at a moment of gangbusters economic growth.

Any schmuck can run a deficit when the economy’s shrinking. But when it’s growing steadily and adding six figures in new jobs month after month?

That’s a bona fide accomplishment. The degree of difficulty is off the charts.

The federal budget deficit is growing faster than expected as President Trump’s spending and tax cut policies force the United States to borrow increasing sums of money.

The deficit — the gap between what the government takes in through taxes and other sources of revenue and what it spends — will reach $960 billion for the 2019 fiscal year, which ends Sept. 30. That gap will widen to $1 trillion for the 2020 fiscal year, the Congressional Budget Office said in updated forecasts released on Wednesday.

That damage would be even higher if not for lower-than-expected interest rates, which are reducing the amount of money the government has to pay to its lenders. Still, the 2019 deficit is projected to be 25 percent larger than it was in 2018, and the budget office predicts it will continue to rise every year through 2023.

The current record for consecutive years with a deficit increase is five, notes the Times — and that during World War II, when the country was marshaling every available resource towards war.

Choose your culprit here — or rather, don’t choose since they’re not mutually exclusive. It starts with Trump, who’s showed zero interest in spending cuts at the same time that he’s pursued massive revenue reduction in the form of tax cuts. Twitter pal Jeff Dobbs reminded me yesterday of this exchange, immortalized by the Daily Beast in an article from December:

Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt…

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office.

“Yeah, but I won’t be here,” the president bluntly said, according to a source who was in the room when Trump made this comment during discussions on the debt.

Trump was chattering about new tax cuts as recently as two days ago, consumed with economic stimulus to improve his electoral chances despite what that would mean for future deficits, particularly entitlements. And that’s on top of the tax revenue lost to the slower pace of economic growth due to his trade war. But it can’t all be laid off on Trump: The many Republican frauds in Congress who pounded the table for smaller government when Obama was in charge are also complicit, of course, starting with Trump’s own chief of staff. If the essential fraudulence of the tea-party era had to be reduced to a single quote, it would be this one from former fiscal superhawk Mick Mulvaney:

The post-Trump era for the Republican Party will be a parade of people whimpering that they privately disagreed with a lot of the things he did and said, but none of that pandering will be as disgusting as the Mulvaneys on the Hill suddenly rediscovering that they’re against deficits once Democrats are back in charge. As it is, the best the Times can do to find Republicans in a position of influence willing to criticize Trump’s spending is John Thune sheepishly saying, “I hope in a second term, he is interested” in entitlement reform, as if he and McConnell couldn’t roadblock any legislation they wanted to right now in order to focus Trump on spending.

And then there are the Democrats, for whom any cut to discretionary spending apart from defense spending is a new Holocaust, stealing bread from the mouths of children by reverting to the archaic spending levels the federal government maintained just one or two years ago. Even defense cuts are uncomfortable for them since it leaves them open to the Republican charge that they’re weak on national security. This year’s presidential primary has been a sustained exercise in who can promise more by way of new spending, with Bernie Sanders rolling out a $16 trillion environmental plan literally yesterday. Invariably lip service is paid to how these programs will “pay for themselves” but no one, progressives included, believes that; the federal track record of blowing through budgets is too long for even semi-plausible deniability. “It’ll pay for itself” is just a way of dismissing the inevitable rejoinder that massive new entitlements like Medicare for All and total student-loan forgiveness aren’t within our means. The “best” argument for preferring Democrats to the modern GOP on deficits is that they at least understand that tax revenue is a component of deficit reduction. The worst is that they’d have to soak the middle class 10 times over to make their agenda deficit-neutral.

Exit question: With both parties trending left on spending, what’s the way out of this? Is there one apart from a massive fiscal crisis that forces a bipartisan reckoning?

David Strom 4:41 PM on September 26, 2022