Republican Deficit Hawking Is About to Backfire

·5 min read

(Bloomberg Opinion) -- House Democrats have put their bid on the table for the next coronavirus-pandemic relief bill: A $3 trillion effort to bail out state and local governments, send more money directly to citizens, and more. The main Republican response was par for the course: more talk about the perils of deficits. Which means that it’s time to revisit what Republicans actually mean when they warn about deficits — or, what I call the Republican war on budgeting.

The short version: When Republicans discuss deficits, they’re usually not pointing to the difference between federal government outlays and receipts. Instead, what they’re actually talking about is the gap between how much a spending program or tax plan costs and what they think it’s worth.

Suppose that Republicans believe that the proper amount to spend on a program is zero. Then they count any spending for that program as a “deficit.” On the other hand, if they believe something is worthy of a $100 billion government outlay, then cutting spending on that item from $90 billion to $80 billion increases the “deficit.” From that point of view, increasing it to $100 billion from the same $90 billion would eliminate the deficit. The same is true with taxes.

If you listen to mainstream Republicans with that in mind, what they say is generally coherent (whether one agrees or disagrees with the specific positions). By contrast, if we take their deficit talk to mean that they actually care deeply about balancing the federal budget, then they are wildly incoherent — not only when they increase federal budget deficits each time there is unified Republican government, but even when Democrats are in the White House, when they are equally uninterested in making deals that would reduce those real deficits by sacrificing Republican tax or spending preferences.

The problem with this is it undermines the discipline of budgeting. Budgeting should be about trade-offs, but if you don’t think in terms of comparing different items, then the concept of trade-offs becomes foreign.

Is the Republican wording actually a thought-through, conscious policy position against budgeting? That’s unclear, but it’s also irrelevant. Listen to Republican politicians and pundits talk and watch how they act; it makes no sense if you think they care about the actual federal deficit, but it is almost always consistent with a war-on-budgeting meaning.

There are plenty of examples, including Republican insistence that the Affordable Care Act had to be opposed because it would increase the deficit (that is, spend more money on something they didn’t like) even though the Congressional Budget Office said it would reduce the deficit (meaning the gap between income and outlays). This also makes sense of Republican insistence that every tax cut they pass will pay for itself. No amount of evidence that, for example, the 2017 tax cut would lower federal revenues will convince them otherwise, because what they’re really saying is that the law brought taxes closer to what they should be.

Republicans, then, are not guilty of hypocritically caring about the deficit only when they are out of office. They never care about the actual budget deficit, while always caring about their specific positions on spending and revenue. It’s true that they deploy the rhetoric of deficit reduction when they believe it will help them politically (which, of course, is the way political parties always use words).

But while the emphasis sometimes changes, the policy usually doesn’t. They favor lower taxes, especially for the wealthy, lower spending on many social programs and higher spending on programs for the military, among a few other things, more or less all the time. What’s striking about the mainstream Republican position is consistency, not hypocrisy. Even during the pandemic, they resisted Democratic efforts to spend money on hospitals and expanded coronavirus testing. Yes, they supported funding to support failing businesses, but again: Republicans don’t consider all government spending to pump up the deficit — just spending on things they don’t like.

Now Senate Majority Leader Mitch McConnell and other congressional Republicans are reluctant to agree to any new pandemic relief and stimulus money. Because, they say, of the deficit. I don’t think this means they expect to lose power in November, as at least one political scientist has speculated, or that they’re bluffing; it just needs translation. When they say they care about deficits, it just means that they oppose this particular kind of spending — in this case, aid to state and local governments, extended unemployment benefits, money for health care and the post office, and more.

One more thing. War-on-budgeting thinking isn’t only a problem because it makes actual budgeting difficult. It also, by insisting on consistent tax and spending preferences no matter what, makes Republicans inherently opposed to using fiscal policy to influence the economy. Even as Federal Reserve Chair Jerome Powell asks Congress to do more to stimulate the economy — something that surely is in Republicans’ electoral interests as the incumbent party — they are reluctant to spend more now, just as they were reluctant to reduce actual federal budget deficits early in the administration of President Donald Trump, when economic times were good.

Inability to budget leaves Republicans ill-equipped to govern. And for that, there’s a good chance they’ll be paying a price in November.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.

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