A Multiple-Choice Question — and All the Answers Are Political Suicide

By Kevin D. Williamson

Thursday, March 03, 2016

Having been elevated in the 2010 elections and fortified in subsequent elections, congressional Republicans have made a little bit of progress on the deficit, which was reduced from 8.7 percent of GDP in 2010 to 2.5 percent of GDP in 2015. In 2007, before the credit crisis and the subsequent recession, it had been about 1.1 percent of GDP — too high for the liking of many deficit hawks, but arguably manageable.

Another way to look at the spending problem is deficit compared to revenue, i.e., how much we’re borrowing to finance spending vs. how much we’re taking in. This gives you an idea of what the “stretch” is, what we’d need to cover in additional taxes or reduce through spending cuts to bring expenditures in line with income. In 2010, the deficit was 60 percent of revenue ($1.29 trillion deficit vs. $2.16 trillion revenue), whereas in 2015 the deficit was 13 percent of revenue ($439 billion deficit vs. $3.25 trillion revenue). For those of you who habitually ask what it is that congressional Republicans have accomplished, that’s it: Despite having Barack Obama in the White House and a public that clamored for more benefits and lower taxes, the deficit has been reduced substantially in absolute terms, relative to GDP, relative to the federal budget, and relative to revenue, since the height of Democratic power under the Obama-Pelosi-Reid triumvirate.

That triumvirate, let’s not forget, was generously financed by Donald Trump, who thinks he should be the Republican presidential nominee.

What might a President Trump do in the way of balancing the budget?

Over the years, many Republican political figures visiting New York have enjoyed National Review’s hospitality, which generally consists of bad coffee and good questions. I have put the question more or less identically to many of them: “Given that almost all of our spending is on popular programs (Social Security, Medicare, Medicaid, national defense) or effectively non-negotiable spending (interest on the debt), how would you balance the budget? Your choices are: Cut spending on entitlements and/or the military, pass a large tax increase, or accept deficits forever. If your answer consists of the words ‘waste, fraud, and abuse’ or appeals to the Growth Fairy, we will roll our eyes and make fun of you after you’ve left, possibly before.”

Those meetings are off the record, and Jonah Goldberg is absolutely correct that such conversations serve a critical function. That being said, no confidences will be betrayed by reporting that Republican leaders’ answers to this question are, generally speaking, unsatisfactory. I have not had the opportunity to put the question to Trump, though others have, and his answers have been, so far, hogwash.

Bernie Sanders is a partisan of the Growth Fairy, promising that we can have a whole candy shop full of welfare benefits without suffering any cavities in the budget. Jeb Bush was a Growth Fairy man, too, as are most of the other Republican presidential contenders, to greater and lesser extents. Donald Trump is a “waste, fraud, and abuse” man, repeating and repeating and repeating that formula when pressed about his budget proposals, which are fanciful at best, and more properly described as delusional.

The ludicrously misnamed Government Accountability Office identified $125 billion in improper payments (mostly through the very health-care entitlements that Trump proposes to expand) in its most recent audit. Multiply that by ten and you come up with $1.25 trillion in improper payments over a decade. Then assume that the GAO isn’t very good at its job, and double the number to $2.5 trillion in improper payments over a decade. That’s not chump change, of course — and we should robustly police every dollar in misused government revenue, as a matter of principle — but even assuming we could prevent the waste of that $2.5 trillion in screw-up money, that does not begin to cover the $9.5 trillion in tax cuts Trump has proposed.

Nor does that account for the additional spending Trump contemplates on things such as health care. Yes, he says we’ll spend less, but what he proposes is universal guaranteed health care with a very large role played by government. Barack Obama thought that he could expand coverage while reducing spending, too, and that’s not how it worked out. Donald Trump’s greatest business innovation thus far has been having the foresight to locate a strip joint inside an Atlantic City casino rather than around the corner from it, and that didn’t stop his daft Taj Mahal project from going bankrupt a few times. If you believe that the business acumen of a game-show host is going to allow the U.S.  government to increase health-care access while reducing spending on health care, you are a fool.

On matters economic, Ted Cruz and Marco Rubio are vastly preferable to Donald Trump, in the sense that having one foot planted in budgetary reality is preferable to having both feet firmly planted in the ether. But, in truth, none of the Republican candidates has, or has had, a truly plausible and responsible program for balancing the budget, for the simple reason that such a proposal would be political suicide. The public loves the idea of a balanced budget, just so long as you don’t have to reduce spending or raise taxes to get there.

Senator Rubio has insisted that we must add to our national arsenal and fleet, and did so in front of an audience in Newport News, Va., which will absorb a great deal of whatever new military spending a President Rubio were to wring out of Congress. Senator Cruz, with Air Force veteran Rick Perry cheering him on, made a similar announcement on the USS Yorktown: a 20 percent larger Air Force fleet, more soldiers, nearly 100 new Navy ships including a dozen new ballistic-missile submarines, etc. Assume, for the moment, that these two would-be commanders-in-chief are right about what is needful: When that new spending is built into the budget, are we going to: 1) make large offsetting cuts and, if so, to what, exactly? 2) raise taxes to pay for it? or 3) accept deficits forever, or at least until lenders wise up?

What congressional Republicans achieved between 2010 and now they achieved in no small part through budget sequestration, which placed meaningful limits on both new military spending and new domestic spending — and was, as a result of that, so enormously unpopular that it was effectively repealed.

Which brings us back to the question: About than 80 percent of federal spending is on Social Security, medical benefits, the military, and interest on the debt. Of that remaining 20 percent that is so-called discretionary spending, much really cannot be eliminated: You can defund the Department of Energy, but the work it does (including the management of nuclear-weapon assets) is going to have to be done by someone, at some expense. So what’s it going to be: Cut popular spending, raise taxes, or live with deficits for as long as the markets will lend us money? We know what answer to expect from the frequently bankrupt Trump, who once financed a casino boondoggle with junk bonds at 15 percent interest.

Cruz and Rubio may not want to answer that question right now, during a hotly contested primary. Fair enough. But somebody is going to have to answer that question, someday.