Up until fairly recently, federal officials believed the nation would have to raise the debt ceiling by late March or early April. Yesterday, the Congressional Budget Office said action will be required even sooner – because the Republican’s $1.5 trillion tax cut is already starting to affect U.S. finances.
According to the budget office, the borrowing limit will most likely need to be raised in early March after the “extraordinary measures” to extend borrowing employed by the Treasury secretary, Steven Mnuchin, are exhausted. The budget office previously projected that the debt limit would need to be raised beyond its current level of $20.5 trillion in late March or early April.
The reason for the change stems from the tax cuts, which went into effect in January and are expected to translate into less revenue for the federal government.
A separate New York Times report added this week that annual budget deficits “are creeping up to $1 trillion and the national debt has topped $20 trillion.” The Treasury Department “will need to borrow $441 billion in privately held debt this quarter,” which is the largest sum in eight years.
And yet, Republicans – ostensibly, the nation’s fiscal hawks and stalwarts of fiscal responsibility – have nothing to say about this. The issue has largely disappeared.
Consider this: in Barack Obama’s first address to a joint session of Congress in early 2009, the Democratic president mentioned the budget deficit eight times. A year later, in his 2010 State of the Union, Obama went further, mentioning the deficit 13 times.
Donald Trump, meanwhile, delivered his first speech to a joint session last year, and while he briefly referenced the “trade deficit,” he made no mention of the budget deficit. This week, in his State of the Union address, the Republican mentioned the “infrastructure deficit,” but again, when it came to the annual budget shortfall, Trump was literally silent.
The underlying issue here is one of the most cynical political scams Americans have ever seen or will ever see.
As regular readers probably know, it’s one of the few constants in American politics. When George W. Bush was president, Republicans put two wars, two tax cuts, Medicare expansion, and a Wall Street bailout on the national credit card – and made no effort to pay for any of it. Dick Cheney declared that “deficits don’t matter” and Orrin Hatch said it was “standard practice not to pay for things” in the Bush era.
Then Barack Obama was elected and many of those same Republicans decided the fate of Western civilization was dependent on balancing the budget.
Remember the Tea Party movement? According to many of its leaders, one of its principal goals was deficit reduction: annual budget shortfalls, they said several years ago, threatened the future of the nation, its families, and its security.
And because Republicans have an amazing ability to dictate the public conversation, everyone played along, taking the deficit seriously throughout the Obama era. To reject the fiscal argument was to condemn our children and grandchildren to future misery.
Under Obama, however, the deficit shrunk in his first seven years by a trillion dollars – that’s “trillion” with a “t” – at which point the issue quietly lost its potency.
At least in theory, for those who care about the deficit, the issue should be back with a vengeance. But it’s not: even as the deficit gets significantly larger, due entirely to deliberate Republican choices, the public conversation largely ignores the issue. Recent polling from the Pew Research Center found that the deficit is steadily fading as a priority.
But we know from recent history those attitudes will shift back the moment Democrats have some power again, because this cynical game is nothing if not cyclical.