Potomac Fever Seizes Republican Leaders Over Federal Spending And Debt (Forbes.com) November 29, 2017
Posted by daviddavenport in Op/Eds, Politics.trackback
A funny thing happened to Republicans on their way to controlling both houses of Congress and the White House: They can’t remember what they believe in, especially about federal spending and debt. Perhaps it’s a case of early onset Alzheimer’s, unable to recall what got you there or what your core principles are, but more likely it’s a bad case of Potomac Fever as power and politics overtake principle.
Historically Republicans have been the party of fiscal discipline, at least rhetorically. But now Washington, DC has become about marketing and positioning yourself and your party for the next election, not deliberating over the best policies for the country. So, in the age of Trump, the self-proclaimed “king of debt” in his business career, Republicans no longer worry about the federal debt. As Treasury Secretary Steve Mnuchin said recently on “Face the Nation,” government spending is “not an issue we’re focused on right now.”
Reports suggest it’s time to be focused on it since the proposed new tax plan is projected to produce around $1.5 trillion of new debt over the next decade, even taking economic growth into account. To paraphrase a quotation attributed to the late Senator Everett Dirksen (R-IL): a trillion here, a trillion there, and pretty soon you’re talking real money. But even the very conservative Freedom Caucus in the House of Representatives seems unconcerned. One of its members, Congressman Scott Perry (R-PA) said, “Somehow, apparently, you can’t do tax reform and save money at the same time,” concluding he’d rather achieve one of those than neither.
Let me propose, however, that there is still a powerful case for reducing federal spending and the national debt. For starters there remains a strong moral case for limiting debt. Admittedly we’re not in the 1920s when President Calvin Coolidge called “carelessness” in the “expenditure of public money” a “condition characteristic of undeveloped people, or of a decadent generation.” But there is an inherent unfairness and lack of discipline in the Baby Boomer generation transferring trillions of dollars of debt to its children and grandchildren to pay for their own entitlements. Sadly we have come to view government deficits as just another tool of economic policy, detached from any moral underpinnings. But as former President Herbert Hoover reminded us: “Blessed are the young for they shall inherit the national debt.”
The economic case for growing the debt is predictive, with experts on both sides. A group of noted economists sent a letter to Treasury Secretary Mnuchin this week saying that the corporate tax cuts should lead to significant economic growth. On the other hand, a survey of 42 economists by the University Of Chicago Booth School Of Business was more pessimistic, with most responding that they were uncertain or that it was unlikely that the proposed tax cuts would lead to significant growth. The problem is that other forces are in play: will there be spending reductions, will entitlement reform be undertaken, will the economy be otherwise robust? Even Ronald Reagan, who championed supply side economics and tax cuts, produced disappointing growth in the federal debt, explained in part because a Democratic Congress would not cut spending.
There is even a national security case for shrinking the national debt, with China and other nations holding huge inventories of US debt instruments. As former chairman of the Joint Chiefs of Staff, Mike Mullen, pointed out: “The single biggest threat to our national security is our debt.”
But in the end, it appears that the political case will carry the day. It is far easier to vote to cut taxes and put money back into voters’ pockets than it is to insist on the sort of spending cuts that should accompany tax relief. Even the chair of the conservative House Freedom Caucus, Representative Mark Meadows (R-NC) acknowledges that the “need to put up some major legislative victories…certainly factors into how flexible…a number of us are going to be.” Flexibility to win victories in the face of principle is a classic symptom of Potomac Fever.
To view the column at Forbes.com:
David Davenport 