{"id":1586213,"date":"2022-08-03T07:31:09","date_gmt":"2022-08-03T11:31:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1586213"},"modified":"2022-08-03T07:33:18","modified_gmt":"2022-08-03T11:33:18","slug":"democrats-work-to-tax-and-spend-even-more-as-federal-debt-deficits-mushroom","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/democrats-work-to-tax-and-spend-even-more-as-federal-debt-deficits-mushroom\/","title":{"rendered":"Democrats Work To Tax And Spend Even More As Federal Debt, Deficits Mushroom"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fdemocrats-work-to-tax-and-spend-even-more-as-federal-debt-deficits-mushroom%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1586213&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>As they work to ram through their <a href=\"https:\/\/thefederalist.com\/2022\/07\/26\/bidens-economic-delusions-and-deceptions-snub-struggling-families\/\">massive tax-and-spending bill<\/a>, Democrats suddenly want to take credit as fiscally responsible deficit cutters:<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\">\n<div class=\"wp-block-embed__wrapper\">\n<span class=\"mlcVEFpTJCrvk49AIzyutD861N5oRidZfXwSQ23BnsYP7eWa\"><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Trump budget bill INCREASED the deficit by $4 TRILLION. <\/p>\n<p>Biden budget bill (announced last night) DECREASES the deficit by $300 BILLION. <\/p>\n<p>There\u2019s only one fiscally responsible party.<\/p>\n<p>\u2014 Chris Murphy (@ChrisMurphyCT) <a href=\"https:\/\/twitter.com\/ChrisMurphyCT\/status\/1552649305961414657?ref_src=twsrc%5Etfw\">July 28, 2022<\/a><\/p><\/blockquote>\n<p><\/span>\n<\/div>\n<\/figure>\n<p>Forget for the moment that the original <a href=\"https:\/\/thefederalist.com\/2021\/12\/13\/republicans-should-force-democrats-to-vote-on-the-full-5-trillion-build-back-bankrupt\/\" target=\"_blank\" rel=\"noreferrer noopener\">Build Back Better legislation<\/a> proposed <a href=\"https:\/\/www.cbo.gov\/system\/files\/2021-12\/57673-BBBA-GrahamSmith-Letter.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">roughly $5 trillion<\/a> in budget-busting spending. Also ignore that, notwithstanding the inflated $4 trillion cost of the President Trump tax bill quoted in Murphy\u2019s tweet, Republicans also have a <a href=\"http:\/\/thefederalist.com\/2017\/12\/04\/dear-congress-tax-rates-wont-ultimately-matter-never-cut-spending\/\" target=\"_blank\" rel=\"noreferrer noopener\">far-from-stellar record<\/a> at cutting spending.<\/p>\n<p>But even assuming the Democrat bill reduces the deficit by the $300 billion over a decade that Sen. Chuck Schumer, D-N.Y., <a href=\"https:\/\/www.democrats.senate.gov\/imo\/media\/doc\/inflation_reduction_act_one_page_summary.pdf\">alleges<\/a>, take a guess at the size of the collective deficits our federal government will run over the next three decades. The total: A staggering $114.4 TRILLION. That\u2019s $114,400,000,000,000 in unpaid-for federal spending.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"624\" height=\"569\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/From-the-Committee-to-Unleash-Prosperity.png\" alt=\"\" class=\"wp-image-276866\" srcset=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/From-the-Committee-to-Unleash-Prosperity.png 624w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/From-the-Committee-to-Unleash-Prosperity-300x274-1.png 300w\" \/><\/p>\n<p><figcaption class=\"col-12 col-md-6 body-xs px-15 pe-md-0 ps-md-30 py-15 m-0 text-center\">From the Committee to Unleash Prosperity.<\/figcaption><\/p>\n<\/figure>\n<\/div>\n<p>This budget bill, even if enacted and implemented as Democrats claim, would reduce the cumulative deficits over the next three decades to \u201conly\u201d $114.1 trillion. In other words, it would allegedly reduce our collective deficit by a currently estimated 0.3 percent. Here\u2019s a visual representation of that \u201cdeficit reduction\u201d even if Democrats\u2019 claims come true (a pretty shaky assumption):<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\">\n<p><figcaption class=\"col-12 col-md-6 body-xs px-15 pe-md-0 ps-md-30 py-15 m-0 text-center\">Image by author.<\/figcaption><\/p>\n<\/figure>\n<\/div>\n<p>Given this meager impact on an overall dismal budgetary picture, perhaps Murphy should stop bragging about Democrats\u2019 supposed \u201cfiscal responsibility.\u201d<\/p>\n<h2><strong>New Budget Office Analysis<\/strong><\/h2>\n<p>The $114 trillion figure comes from a new report by the Congressional Budget Office (CBO) regarding the nation\u2019s long-term budget outlook. Ironically enough, as Schumer and Sen. Joe Manchin, D-W.Va., were working behind closed doors to put the final touches on their <a href=\"https:\/\/thefederalist.com\/2022\/07\/26\/bidens-economic-delusions-and-deceptions-snub-struggling-families\/\" target=\"_blank\" rel=\"noreferrer noopener\">tax-and-spending spree<\/a> last Wednesday afternoon, CBO was <a href=\"https:\/\/www.cbo.gov\/publication\/57971\" target=\"_blank\" rel=\"noreferrer noopener\">releasing a report<\/a> quantifying the vastness of the fiscal gap we face in the coming years.<\/p>\n<p>CBO estimates deficits will go from 3.9 percent of GDP in the fiscal year ending Sept. 30 to 11.1 percent of GDP by 2052. Multiplying CBO\u2019s estimated annual deficits as a percentage of the economy by their <a href=\"https:\/\/www.cbo.gov\/system\/files\/2022-07\/57971-Data.xlsx\" target=\"_blank\" rel=\"noreferrer noopener\">estimates of GDP in each year<\/a> provides the $114 trillion figure for our cumulative deficits from now through 2052.<\/p>\n<p>Most ominously, CBO believes that net interest costs will rise sharply, from 1.6 percent of GDP in the current fiscal year to 6.2 percent by 2052. Like a snowball rolling down the proverbial hill, or someone who keeps paying the minimum on his credit card, the debt we have accumulated will require more and more resources to fund every year. Moreover, this near quadrupling of federal interest costs as a percentage of our economy means paying down government debt will squeeze out private investment\u2014making our economy permanently less productive and poorer.<\/p>\n<h2>Unrealistic <strong>Assumptions<\/strong><\/h2>\n<p>Believe it or not, the assumptions behind these CBO calculations actually make our fiscal situation look <em>good<\/em> compared to more realistic scenarios. Consider the following:<\/p>\n<ul>\n<li>CBO assumed that discretionary spending\u2014that\u2019s the portion of the federal budget that includes defense, border security, transportation, K-12 education, and most government programs beyond Medicare, Medicaid, and Social Security\u2014will decline as a percentage of GDP. However, this assumption would require a significant reduction in spending compared to the average over the past two decades. As one might expect, a budget that assumed discretionary spending would remain near historical averages would increase future deficits and debt.<\/li>\n<li>CBO assumed that revenues would increase following the expiration of many provisions of the Trump tax bill in 2025, while adding that \u201cthis upward trend [in federal revenues] does not align with experience.\u201d If instead revenue aligned with the historical average over the past 50 years, and discretionary spending aligned with historical practice, total federal debt in 2052 would total 262 percent of GDP, rather than \u201conly\u201d 185 percent in the scenario cited above.<\/li>\n<li>Beginning with this year\u2019s report, CBO used different methods for determining interest rates and the growth of health care costs in the years beyond the official 10-year budget window. Both of the new scorekeeping methods had the effect of lowering cumulative deficits in the \u201cout years,\u201d i.e., the second and third decade studied by CBO.<\/li>\n<\/ul>\n<p>Even with a series of favorable and potentially unrealistic assumptions, the CBO report shows how debt and deficits will soon skyrocket to unsustainable levels.<\/p>\n<h2><strong>Congress Needs Big Cuts, Not to Spend Like Nuts<\/strong><\/h2>\n<p>All the talk of billions and trillions can either make one\u2019s eyes glaze over, make one depressed, or both. But one paragraph in the CBO report puts the choices we face in more understandable and practical terms:<\/p>\n<blockquote class=\"wp-block-quote\">\n<p>If lawmakers wanted debt in 2052 to remain at roughly its level at the end of this fiscal year (about 100\u00a0percent of GDP), they could, for example, cut noninterest spending or raise revenues (or do both) to reduce the deficit in each year beginning in 2027\u00a0by an amount equal to 2.8\u00a0percent of GDP, which would amount to $800\u00a0billion, or about $2,400\u00a0per person, in 2027.<\/p>\n<\/blockquote>\n<p>In other words, if we wanted to stabilize federal debt, lawmakers would need to find budget reductions equal to $2,400 per person per year\u2014not budget reductions per <em>household<\/em>, but for every man, woman, and child in this country. Keeping spending at that lower level would <em>still<\/em> leave the federal government with debt at historically high levels, and near the all-time high of 106 percent of GDP, set just after World War II.<\/p>\n<p>Of course, spending reductions (or tax increases, or both) necessary to achieve this level of fiscal savings could well spark an economic downturn. But a CBO <a href=\"https:\/\/www.cbo.gov\/system\/files\/2022-04\/57867-Debt.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">report<\/a> released earlier this year shows that failing to act in a prompt manner will <a href=\"https:\/\/www.wsj.com\/articles\/cbo-sounds-a-warning-of-american-fiscal-ruin-tax-increases-gdp-federal-debt-saving-work-private-investments-11652635997\" target=\"_blank\" rel=\"noreferrer noopener\">only make the problem worse<\/a>, as federal debt slowly strangles the economy over time.<\/p>\n<p>Unless and until Murphy wants to propose the kinds of savings contemplated in the CBO report\u2014that\u2019s $800 billion of deficit reduction <em>in one year<\/em>, rather than $300 billion over a decade\u2014he might want to stop preposterously claiming fiscal responsibility. Because, in the words of Winston Churchill, he and his fellow spendthrift lawmakers have much to be modest about.<\/p>\n<hr class=\"wp-block-separator\" \/>\n<div class=\"article-author-description fst-italic\">\n  Chris Jacobs is founder and CEO of Juniper Research Group, and author of the book, &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He is on Twitter: <a href=\"http:\/\/www.twitter.com\/chrisjacobshc\">@chrisjacobsHC<\/a>. Previously he was a senior health policy analyst for the Texas Public Policy Foundation, a senior policy analyst in The Heritage Foundation\u2019s Center for Health Policy Studies, and a senior policy analyst with the Joint Economic Committee\u2019s Senate Republican staff. During the debate over the Patient Protection and Affordable Care Act, popularly known as Obamacare, Jacobs was a policy adviser for the House Republican Conference under then-Chairman Mike Pence. In the first two years of the law\u2019s implementation, he was a health policy analyst for the Senate Republican Policy Committee. Jacobs got his start on Capitol Hill as an intern for then-Rep. Pat Toomey (R-Pa.). He holds a bachelor\u2019s degree in political science and history from American University, where he is a part-time teacher of health policy. He currently resides in Washington, D.C.<\/div>\n<div class=\"article-comments mt-30 mt-sm-60\">\n<div class=\"article-comments-container d-flex flex-column align-items-center py-30\">\n    <img loading=\"lazy\" decoding=\"async\" width=\"110\" height=\"106\" src=\"https:\/\/thefederalist.com\/wp-content\/uploads\/2021\/12\/fdrlst-mark.svg\" class=\"img-fluid mb-20\" alt=\"The Federalist logo eagle mark\" \/>    <\/p>\n<p>Unlock commenting by joining the Federalist Community.<\/p>\n<p>    <a href=\"https:\/\/thefederalist.com\/plans\/pricing\/\" class=\"btn btn-on-white\">Subscribe<\/a>  <\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>As they work to ram through their massive tax-and-spending bill, Democrats suddenly want to take credit as fiscally responsible deficit cutters: Trump budget bill INCREASED the deficit by $4<\/p>\n","protected":false},"author":521,"featured_media":1586520,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1586213","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1586213","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1586213"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1586213\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1586520"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1586213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1586213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1586213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}