![]() They have come to believe that Republicans would happily do the same again with any future budget deals - putting aside deficit concerns and effectively turning budget savings into new tax breaks.Īt the same time, both parties have grown more wary of cuts to Social Security and Medicare. Many Democrats now believe those lower deficits gave Republicans the fiscal and political space they needed to pass a tax-cut package in 2017 under President Donald Trump that the Congressional Budget Office estimated would added nearly $2 trillion to the national debt. ![]() That agreement, between President Barack Obama and Speaker John Boehner, limited discretionary spending growth for a decade, helping to drive down budget deficits for years. Those comments reflected a lesson Democrats took from 2011, when Washington leaders last made a big show of pretending to care about debt in a bipartisan deal to raise the borrowing limit. Gwen Moore, D-Wis., said shortly before the final vote on the Fiscal Responsibility Act, as it is called, on Wednesday. “Before the ink is dry on this bill, you will be pushing for $3.5 trillion in business tax cuts,” Rep. Republican leaders now appear poised to introduce a new round of tax-cut proposals, which would likely be financed with borrowed money, a move Democrats decried during the floor debate over the debt-ceiling deal. Instead, Republicans attempted to frame mounting national debt as solely a spending problem, not a tax-revenue problem, even though tax cuts by both parties have added trillions to the debt since the turn of the century. They rebuffed Biden’s pitch to raise trillions of dollars from new taxes on corporations and high earners, and both sides wound up agreeing to cut funding for the IRS that was expected to bring in more money by cracking down on tax cheats. Negotiators for McCarthy effectively walled off the other half of the debt equation: revenue. “It’s Medicare, Social Security, interest on the debt.” “The majority driver of the budget is mandatory spending,” he said. While Republicans at first balked when Biden accused them of wanting to cut those politically popular programs, they quickly switched to blaming the president for taking them off the table.Īsked on Fox News on Wednesday why Republicans had not targeted the entire budget for cuts, Speaker Kevin McCarthy replied, “Because the president walled off all the others.” The cost of those programs is expected to soar within 10 years as retiring baby boomers qualify for benefits. Early in the talks, both parties ruled out changes to the two largest drivers of federal spending growth over the next decade: Social Security and Medicare. The deal included no major cuts to military spending, which is larger than base nondefense discretionary spending. Currently, base discretionary spending accounts for less than one-eighth of the $6.3 trillion the government spends annually. As a share of the economy, it is well within historical levels, and it is projected to fall in the coming years. That’s the part of the budget that funds Pell grants, federal law enforcement and a wide range of domestic programs. But negotiators from the White House and House Republican leadership could only agree to find major savings from nondefense discretionary spending. Republicans cited that mounting debt burden as a reason to refuse to raise the limit, risking default and financial crisis, unless Biden agreed to measures to reduce future deficits. ![]() The agreement cuts federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, by essentially freezing some funding that had been projected to increase next year and then limiting spending to 1% growth in 2025.īut even with those savings, the agreement provides clear evidence that the nation’s overall debt load will not be shrinking anytime soon. The bipartisan agreement to suspend the debt ceiling for two years, which passed the Senate on Thursday, effectively sets overall discretionary spending levels over that period. With that pretense comes the reality that the fundamental drivers of American politics all point toward the United States borrowing more, not less. But Washington is back to pretending to care about debt, which is poised to top $50 trillion by the end of the decade even after accounting for newly passed spending cuts.
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