Did you know there was another government shutdown Friday?
It only lasted a few hours, but the $400 billion budget bill Congress ultimately passed and President Donald Trump signed is expected to balloon federal deficits to the tune of $1 trillion a year.
This is the fifth government funding measure for the fiscal year that began Oct. 1. It extends the government’s funds until March 23 and borrowing authority until March 2019.
The Republican party has traditionally labeled itself “fiscally conservative,” and has blamed Democratic party-supported programs like Social Security and Medicare for driving up deficits.
But facts don’t lie.
Congressional Republicans and Trump are expanding the budget deficit and $20 trillion national debt.
Friday’s budget deal permits an additional $165 billion in defense spending over two years. Moreover, budget savings or revenue increases will rely on government borrowing.
The radical tax overhaul passed in December will add an estimated $1.5 trillion to the national debt over 10 years. Former President Barack Obama’s Treasury Secretary Jack Lew argues it could “leave us broke” and fears how the deep cuts to social safety programs could blight our country for decades.
If we recall, Republicans crowed about President Obama’s 2009 American Recovery and Reinvestment Act of 2009 being too high at $787 billion over 10 years.
The difference is 2009’s economy is not today’s economy.
In 2009 the economy needed stimulation after former president George W. Bush left the White House with the nation deeply in debt due to two unfunded wars and tax breaks to the wealthy.
When Barack Obama stepped into the Oval Office, we were hemorrhaging 700,000 jobs per month.
The Republicans’ current $1.5 trillion tax cut combined with hundreds of billions of dollars in federal spending will provide a larger short-term stimulus than Obama’s.
The Trump administration is also expected to unveil a $1.5 trillion infrastructure package slated to include $200 billion in new federal spending.
Some fear that substantial an economic boost could ignite faster inflation, motivating the Federal Reserve to increase interest rates that would raise federal borrowing costs.
All in all, the tax cuts and spending increases total $800 billion in additional deficits this year and next.
Maya MacGuineas, president of the Committee for Responsible Fiscal Budget, warns:
“This is exactly the wrong fiscal policy at the wrong time. We should be bringing down the debt and ensuring we have room for stimulus during downturns. Instead we are overheating the economy and selling out the future. It’s shortsighted and foolhardy.”
So when the economy crashes, which it is inevitably wont to do, we may not have enough cushion to withstand it, all for tax breaks for people who don’t need them and a military industrial complex about which former president Dwight D. Eisenhower warned us.
And this coming from the “fiscally conservative” party.
Remember that in November.
Image credit: cfcpac.org
