It’s a new year, but old congressional spending battles loom


Judy Woodruff: Over this holiday break, Republicans in Congress celebrated their tax cut bill and stressed plans to rebuild the military and infrastructure. But they spoke less about a tough trade-off involved, adding to the government's red ink problem.

Our Lisa Desjardins looks at how lawmakers are spending, and a potential budget collision ahead.

Lisa Desjardins: That's right, Judy.

To get our hands around this, we have with us longtime spending watcher Stan Collender. He is a professor of public policy at Georgetown University's McCourt School and a contributor to Forbes magazine.

And I want to start just breaking down some of the big examples here, Stan. Let's look quickly. The tax cuts, that's estimated to be about $1.5 trillion to $2 trillion it would add to the deficit over 10 years. Disaster aid, three hurricanes and wildfires last year, there are proposals for $100 billion there.

And infrastructure, President Trump proposing another $200 billion there. Not clear how this will be paid for. And I want to ask you about another big one, budget cuts. This year is unique, in that across-the-board spending cuts called the sequester are to go in place, but now Republicans and Democrats want to lift those, which would add to the red ink. Can you explain this?

Stan Collender: Sure.

Let me make a less-than-bold prediction. That is, those spending cuts will never happen. Republicans want and some Democrats want more for domestic spending. Democrats more on a parity basis for domestic spending.

So, they're going to try to raise the caps. That is, caps, limits on spending were put in place as part of the budget deal several years ago, with the idea that they would never take place, that these cuts would be so dastardly that Congress would do everything to avoid it. They didn't think avoiding it meant raising the caps. They thought it meant cutting other spending or increasing revenues.

Now we're just going to increase the deficit. So to get to your basic point, how are they going to pay for this, they're not. They're going to borrow to pay for it.

Lisa Desjardins: What does this mean then? Because we do have a major funding deadline, short-term deadline, coming up January 19. That's when the latest government funding bill runs out.

How does this bigger budget cap and spending cuts battle affect that?

Stan Collender: Well, in a perfect world, Democrats and Republicans and the White House would get together by January 19 and work out a deal.

That's very unlikely, given the hyper-partnership that's going on, given the unpredictability of President Trump. So chances are we're going to get another short-term funding bill, I'm guessing until the end of this month, that is, the end of January, to give them more time to deal with it.

But, ultimately, what it means is more spending than we're currently expecting than was even on the list that you put down there, and a much higher deficit.

I'm saying, and I have been saying for months for my readers, that we're looking at deficits of $1 trillion to $1.2 trillion a year every year during the Trump administration.

Lisa Desjardins: We do have a longer list of these kind of spending items in our weekly politics newsletter.

But I have a bigger question here. I have been on the halls in Capitol Hill. I have been talking to Republicans. And even some members of the conservative Freedom Caucus these days seem to even shrug off or they're holding their nose about these spending decisions.

This was the party of the deficit hawks. For Republicans, is this spending a change in philosophy, or is this just a change of short-term priority?

Stan Collender: Look, I'm going to say it differently. It wasn't a change, because the Republicans never really cared that much about the deficit to begin with. They cared about the deficit when it was a way to stop someone else, Barack Obama's proposals from happening.

But now that it's their proposal, tax cuts, defense increases, the deficit be damned. They want to move ahead and do what they want to do. And if it means that it induces or forces cuts or forces people to look at cuts in things like Medicare and Medicaid and Social Security, so be it, as far as they're concerned.

Lisa Desjardins: Well, I'm sure Republicans would point out the concerns about the deficit and balanced budgets predate Barack Obama and go back before that.

Stan Collender: Oh, sure.

But the same people who were big on balanced budget amendments to the Constitution and spending deals that would result in a balanced budget in 10 years, they just have gone by the wayside. That was in many ways just subterfuge to get through what they wanted to do then, so they could do what they want to do now.

Lisa Desjardins: And the last question, we're talking about politicians here.

But voters also, in polling, they don't seem so concerned about spending and deficits right now. That's different than six years ago, when we saw that kind of spiking and people were worried about it.

Playing devil's advocate here, maybe do Republicans not need to pay attention if voters aren't paying attention?

Stan Collender: Well, undoubtedly, the polling for the Republicans we're using showed exactly what you just said, which is that given a choice between a tax cut and a deficit increase, no problem, we will take the tax cut every time.

But when tax cuts don't produce that much for the average person and start spiking up interest rates and inflation, and it starts people — and people start to hurt to feel by it, they will start to worry about the deficit again, and it's just going to be more difficult to deal with it.

Lisa Desjardins: Classic short-term but long-term problem.

Stan Collender: Right.

Lisa Desjardins: Stan Collender, @TheBudgetGuy on Twitter, thank you very much for joining us.

Stan Collender: You're welcome.


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