(Originally appeared in Reason)
Being an elected Republican today means navigating a fundamental contradiction: Voters love bold spending cuts in theory but hate them in practice. Surveys have long shown that Americans want deficit reduction and a smaller government. “Washington spends too much money” is one of the easiest applause lines in politics. But when asked about specific programs—Social Security, Medicare, defense, veterans’ benefits, infrastructure, education, border security, the safety net, and nearly every other federal budget item except, perhaps, the 1 percent of total spending going to foreign aid and NASA—the electorate demands even more spending. Across the spectrum, voters prefer to talk like Sen. Barry Goldwater and spend like LBJ.
Democratic lawmakers handle the voter contradictions by emphasizing their support for expanding popular programs and vaguely hinting that taxing the rich can pay for it all (it cannot). Republicans, by contrast, square the circle with budget gimmicks. They make grand pledges to balance the budget within a decade and push for popular budget rules to create the illusion of spending restraint. Then GOP lawmakers simply ignore their own rules and continue spending and borrowing as usual. The current budget and tax debates have become a festival of gimmicks—here are the GOP’s 10 most egregious ploys:
Fake Expiration Dates. When Congress passes an expensive new policy but wants to hide the enormous long-term cost, it often employs fake expiration dates. The 2017 tax cuts were always intended to be permanent, but to hide their true long-term cost, lawmakers set the most popular aspects of the Tax Cuts and Jobs Act (TCJA) to expire at the end of 2025. As that expiration date nears, Republicans are not only preparing to extend (and likely expand) these tax policies but will probably make them expire within five to eight years again to create the illusion of a 10-year price tag no higher than $4.5 trillion. As Congress continues to renew these popular policies, the federal budget will face a long-term cost that has never been fully disclosed or admitted.
Current Policy Baseline. A corollary to the fake expiration dates above, this wonky term refers to Congress bypassing its own budget rules to pretend that removing the expiration dates has no deficit cost. The lawmaker two-step begins with Congress first making a new tax cut temporary, so that it requires offsets only up to the expiration date. Then, down the road, Congress simply eliminates the expiration date—with no offsets of the extended cost—under the argument that “extending current policies doesn’t count as a new tax reduction.” The result is a permanent tax cut that includes offsets only for the first few years. GOP lawmakers are considering using this gimmick to extend the expiring TCJA without any offsets.
Fake Budget Resolutions. The new Republican Congress entered 2017 facing steeply rising deficits. The House of Representatives responded by passing and trumpeting a bold budget resolution aiming to save $6.5 trillion over the decade and balance the budget. Except the whole exercise was fake. It did not require Congress to actually enact the savings or even detail specifically how it could meet the targets. The budget was merely a set of numbers showing how the deficit would theoretically decline in the (extraordinarily unlikely) event that Congress enacted $6.5 trillion in 10-year savings. This did not stop Congressional Republicans from triumphantly declaring that they had in fact passed a balanced budget—and then proceeding to instead blow up the deficit with a $1.5 trillion tax cut, a budget-busting farm bill, and a 13 percent discretionary spending expansion. This 2017 example is no outlier, but rather one of many fake GOP budgets that have been produced over the last few decades.
Rosy Economic Scenarios. Nearly every Republican budget relies on implausibly aggressive deficit reduction. One trick is assuming—with little to no basis—that a historic economic boom will suddenly generate trillions in new tax revenue. For instance, this year’s House Republican budget assumes a permanent leap in economic growth rates that would require labor productivity growth rates to nearly double. This questionable assumption adds $13 trillion to the projected 10-year gross domestic product and $2.6 trillion in projected new tax revenues. Similar past rosy assumptions have repeatedly proven false, and this year’s Republican budget contains no major policy changes that could plausibly produce this historic productivity jump.
Discretionary Spending “Magic Asterisks.” Another staple of Republican budgets is assuming that 10-year deficit-reduction targets will be accomplished by future Congresses drastically slashing discretionary appropriations by as much as nearly half of their share of the economy. For instance, this year’s House GOP budget combines a $300 billion short-term expansion of defense and border appropriations with the absurd assumption that future Congresses will slice discretionary spending as a share of the economy one-quarter below current levels—to its lowest level since the 1930s. These future savings are never specified and never take place. The following year brings another short-term appropriations hike and promised future savings are again pushed out to another day that will never arrive.