The GOP’s Budget Hypocrisy

Some GOP leaders will work to meld the House and Senate budget resolutions during this spring recess, while most Republican members of Congress will be telling constituents that they made hard choices in order to balance the budget. Few will mention that their budget resolutions pave the way for Congress to spend $355 billion more than federal revenues in fiscal year 2016, and far more when adjusted to eliminate accounting tricks.

Everyone is entitled to their belief about the desirability of trying to balance the federal budget, but not everyone is entitled to their own math. That math poses an awkward problem for Republicans who campaigned against rising federal debt. In fiscal 2016 a Republican Congress will add at least $3000 per household. GOP leaders claim credit—and often accept blame—for domestic spending that is lower than the level included in Democratic budgets. They attempt to evade responsibility for supporting a federal government that costs far more than revenues produced by existing taxation.

In an effort to deflect attention from next year’s deficit, congressional Republicans GOP leaders cook the budget books to create the illusion of a budget that balances in ten years. Their projections assume that future sessions of Congress will spend a lower percentage of national income than this one will. That is like a man who uses an online dating service, posts a photo-shopped picture of himself 50 pounds lighter, and explains to a startled date that years from now he plans to eat less. According to the Congressional Budget Office (“CBO”), current spending would have to be cut by half a trillion dollars in order to bring today’s spending in line with share of national income that Republicans propose for 2025.

GOP leaders also use accounting tricks to disguise the size of deficits envisioned during fiscal year 2016, which begins October 1. Their budget resolutions reflect higher levels of defense and transportation spending than permitted by the Budget Control Act of 2011, while claiming those increases would be funded by unidentified “reserves” rather than debt. Those reserves consist of nothing more than the hope that total spending will be less than the sum of all budgeted categories of spending.

The budget resolutions passed last week also use the military as a pawn in budget gamesmanship. By allocating $36 billion more for combat operations than the military needs or requests, the House siphoned higher spending into a category of costs that are exempt from ceilings imposed by Congress in a 2011 push to restore fiscal discipline. In addition, the resolutions understate the deficit for fiscal year 2016 by failing to account for anticipated legislation that will increase fees for Medicare services and extend tax breaks that expired last year.

Unrealistic forecasts, evasion of spending ceilings, and failure to incorporate the impact of crucial legislation are fig leaves used to hide the extent of GOP-endorsed borrowing. There are, of course, some spending cuts, notably the elimination of new benefits from the Affordable Care Act. By retaining tax revenues and Medicare savings arising from that act and cutting only the cost of expanded coverage, the CBO estimates a savings of about $95 billion next year. That amount is less than a quarter of the CBO’s forecasted baseline deficit. Because of a presidential veto, Republican leaders pin more hope on Supreme Court action that would eliminate federal subsidies for policies sold on exchanges.

Though that action could “save” about half of the $95 billion next fiscal year, most observers expect the GOP to provide alternative financing—Boehnercare?—to sustain insurance for millions of Americans who purchased subsidized policies on exchanges.

So far Democratic talking points have emphasized the hardship caused by the Republican resolutions rather than the size of the GOP-endorsed deficits. Republican incumbents are more likely to focus on those deficits. Senators Ted Cruz and Rand Paul voted against the Senate budget resolutions in preparation for their presidential primary battles. Last year former GOP Majority Leader Eric Cantor lost to a primary challenger who reminded voters that Congress has the sole constitutional power to authorize spending and borrowing.

While it is tempting to defer hard budget choices until after the next election, there is always a next election. The can of debt gets heavier each time it is kicked down the road. The CBO projects that the annual interest expense on debt will soar from $435 billion last year to $1 trillion ten years from now. By then 40 cents of each dollar paid in personal income taxes, and each penny of any promised tax relief will require a much higher percentage cut in other spending in order to close the fiscal gap.

Political hypocrisy is old news, which is why most reporting and commentary on the budget resolutions focuses on issues other than the willingness of GOP leaders to embrace debt financing. GOP political consultants focused on the next election would prefer to contrast that borrowing with higher levels incurred during the first term of the Obama administration, in the midst of two raging wars and the Great Recession.

In the long run, however, the willingness of Republican congressional leaders to borrow trillions of dollars can undermine public support for their own “small government” conservative agenda. Swing voters are more likely to oppose debt used to fund health insurance than to believe that expanded coverage is somehow undesirable. They are also likely to be more dubious that only a Republican president can balance the budget, especially if Democrats nominate a candidate who lived in the White House when the budget last balanced.

Bill White

Bill White , chairman of Lazard Houston, is the author of America's Fiscal Constitution: Its Triumph and Collapse. He was the mayor of Houston from 2004 to 2010 and the U.S. deputy secretary of energy from 1993 to 1995.