Francis Chung/POLITICO via AP Images
House Speaker Kevin McCarthy speaks alongside House and Senate Republicans during a bicameral press conference on the debt ceiling outside the U.S. Capitol, May 17, 2023.
During the whole of the ongoing hostage negotiation over the debt ceiling, Republicans have repeatedly claimed that they’re demanding massive spending cuts because the government is borrowing too much. “They actually want to spend more money than we spent this year,” Speaker of the House Kevin McCarthy recently claimed about Democrats. “We can’t do that. We all know how big this deficit is.”
As McCarthy’s Republican colleagues make clear, this is, ad nauseam, the party line. “I have said since I first ran that I would not vote for a debt ceiling increase apart from the cuts in spending that would put us on a path to fiscal responsibility,” said Rep. Bob Good (R-VA) some months ago. “The point is that this current debt crisis has been created solely by reckless Democrat policies and out-of-control spending,” said Freedom Caucus chair Rep. Scott Perry (R-PA).
Rep. Ken Buck (R-CO) said he voted against the House Republicans’ plan because it didn’t cut the debt enough. “The Republican plan yields $53 trillion in debt, and $53 trillion in debt is unacceptable to me. We go off the cliff at some point,” he said.
But all these are bald-faced lies. Republicans do not care even slightly about the national debt. The last time they had the run of the federal government, they passed laws that required tremendous borrowing. If and when they get control once more, they will do the exact same thing.
One obvious piece of evidence here is that the Biden administration has proposed numerous revenue-raisers as part of the negotiations, only to be dismissed out of hand. Jeff Stein reports at The Washington Post: “On a phone call last week, senior White House officials floated about a dozen tax plans to reduce the deficit as part of a broader budget agreement with House Republicans, including a measure aimed at cryptocurrency transactions and another for large real estate investors, two of the people said. They were all swiftly rejected by the GOP aides on the call, the people said.”
If one were legitimately concerned above all with budget deficit, then it makes no sense to categorically rule out reducing it with more taxes rather than benefit cuts. A dollar is a dollar either way—and especially at a time of historically gigantic corporate profits, one would think deficit scolds would conclude that soaking the rich at least a bit should be part of the program. But one would think wrong.
A supporting piece of evidence here is that Republicans’ ransom demands include rescinding the additional $80 billion in funding for the IRS passed in last year’s Inflation Reduction Act. Funding the IRS not only greatly improves the agency’s customer service—thanks to that money, phone response time fell by 84 percent during the 2023 tax season—it will also more than pay for itself. The Congressional Budget Office estimated that the new funding will produce a net revenue increase of $124 billion over a decade.
The reason is that chronic IRS underfunding has led to a collapse in the audit rate, and hence an enormous “tax gap” of unpaid taxes, largely among the rich. “Three fifths of the tax gap is due to underreporting of income by the top 10% of taxpayers, and more than a quarter comes from the top 1%,” writes Vanessa Williamson at the Brookings Institution. “Audits of millionaires have dropped 61% in less than a decade. For those making more than $5 million, the audit rate has dropped 87%.”
One would think that even for people who don’t favor tax increases as the best way to cut the deficit, making sure that the wealthiest pay what they actually legally owe would be a good deficit-cutting idea. But—again—one would think wrong.
The most convincing piece of evidence that Republicans are lying has to do with the Trump tax cuts. These were basically the only piece of major legislation the GOP passed under Trump (he did sign the pandemic relief bills, but they were designed and written by House Democrats), and despite the usual predictions that they would pay for themselves through supply-side magic pixie dust, they blew up the deficit.
House Republicans didn’t include extending the Trump tax cuts in their debt ceiling ransom note, but Rep. Vern Buchanan (R-FL) sponsored a bill in February to make them permanent, as many of their provisions will expire in 2025. At least 72 other House Republicans joined as co-sponsors, including the Freedom Caucus’s Rep. Perry. McCarthy isn’t on that list, but he did endorse the idea in October of last year.
So it’s interesting that the Congressional Budget Office recently estimated that making the Trump cuts permanent would increase the national debt between 2024 and 2033 by a whopping $3.5 trillion. Sounds like a lot!
It goes without saying that this report did not change any Republican views whatsoever. It’s absolutely certain that if Republicans win control of Congress and the presidency in 2024, they will make the Trump-era cuts permanent, and probably add some more.
This is just the latest in a long pattern of Republican behavior. When a Democrat is president, they scream and cry about budget deficits, demanding sweeping spending cuts, and shut down the government or take the debt ceiling hostage to get them. Those unpopular cuts typically harm the economy, for which the president and Democrats are blamed. Then when it’s Republicans’ turn, they take all the budget headroom created by the austerity and immediately hand it to their oligarch benefactors in the form of tax cuts for the rich, blowing the deficit back up. We saw this cut-and-inflate pattern during the Clinton and Bush administrations, and again during the Obama and Trump administrations. We’re seeing it again today.
Increasingly, the beneficiaries of this duplicitous two-step include Republican members of Congress themselves. Buchanan is a wealthy man, and personally benefited from the Trump tax cuts to the tune of an estimated $2.1 million. That may be the reason why on the very day the law was signed, he went and bought himself a multimillion-dollar yacht.
There are many reasons for President Biden to consider executive action to abolish the debt ceiling once and for all. But a big one is to get rid of one way that conservatives can punch the American economy in the solar plexus so they can hand millions of dollars to their donors and themselves.
