Do Deficits Matter?

Friday, April 24, 2015 12:26 PM | NCSA Website Manager (Administrator)
The answer, it seems, depends upon when you ask and who the audience is. If you ask during an election campaign and the candidate is a tea party conservative, deficits matter a lot. When that candidate is elected, then the answer becomes, not so much.
 
In any event, it is confusing when Republicans in Congress who came to power pledging tight-fisted budgeting are in the midst of a tax-cut and spending binge that would boost federal deficits by a half-trillion dollars.
 
For example:
 
The House voted April 16 to repeal the estate tax, paid by only 0.2 percent of U.S. estates, and to permanently extend tax deductions for state and local sales taxes—without offsetting the cost of either measure. Those moves would combine to expand the deficit by $311 billion over 10 years. The House passed a bill to revive section 179 expensing for small businesses without offsetting the cost, which is estimated at $79 billion over ten years.
 
Congressional efforts to extend other tax breaks without offsets to the tune of hundreds of billions of dollars. Republicans also have proposed increasing military spending beyond the caps agreed to in 2011, through a separate budget line called overseas contingency operations.
 
The deficits be damned binge even has some Republicans confused. "How are you going to balance the budget when you are spending all of this money?" said Rep. Walter B. Jones (R-N.C.). "We were the party that advocated less government and less spending. We aren't keeping our promise." Sen. Mike Lee (R-Utah), in an opinion column in the Deseret News, complained that the new spending "comes right after the Senate just passed a 10-year balanced budget that specifically doesn't account for these additional costs." He added, "That's how a feel-good, bipartisan compromise comes in—with a $141 billion price tag."
 
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement that adding more debt atop a record-high level of $18 trillion is worrisome. "This failure to pay for this legislation is completely at odds with rhetoric about fiscal responsibility and balanced budgets," she said. "It is impossible to take a budget resolution seriously if lawmakers pass a balanced budget and then bust that budget plan before it is even finalized."
 
Those who previously complained that we were all stuck with a do-nothing Congress now have a Congress that is geared for action. Whether it is the type of action that we wanted is another matter. 


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