Will Republicans Ever Stop Lying About the Debt?

Despite all his anti-Trump bluster, John Kasich peddles the same deceitful pronouncements about the debt as the rest of the GOP.

It is an established convention of the mainstream media that when journalists stumble across a Republican who can walk fully upright and doesn’t club baby seals for recreation, they must transform him into the Conscience of the Republican Party—the great hope to redeem the GOP. Someone whom thoughtful independents can safely vote for.

We have seen this whitewashing procedure in action with Senators Jeff Flake and Bob Corker, although they both bailed out from reelection efforts shortly after their anointing. Senator Ben Sasse is also in the queue for media canonization, although he has kept a lower profile. Another is Ohio Governor John Kasich, who is term-limited by the state’s constitution, but who is said to be nurturing presidential ambitions.

Disclaimer: I worked for Kasich when he was a House member. Despite the apt epigram that “no man is a hero to his valet,” I can stipulate that he is clinically sane and politically experienced. During the appalling freak show that was the 2016 Republican primary, he was maybe the only candidate who appeared like an adult in full possession of his faculties.

He’s been on an anti-Trump streak of late, publicly lamented in the wake of Trump’s family separation policy that “we have lost our sense of humanity. ” And as might be expected of the governor of a manufacturing state that stands to lose the most from Canadian retaliation against U.S. steel and aluminum tariffs, Kasich has opposed Trump’s berserk trade policy, wondering why congressional Republicans don’t more effectively oppose the president.

Kasich has been slow to realize that congressional Republicans visibly bear the same groveling relation to the president that members of the Soviet Central Committee bore to Comrade Stalin. Through gritted teeth, Trump’s enablers in Congress will prefer to silently endure economic devastation in their home districts to running afoul of the Maximum Leader.

Yet, even Kasich, supposedly one of the few remaining sane Republicans, leaves the realm of occasional thorn-in-the-side to Trump and his enablers to peddle the same deceitful pronouncements as the rest of the GOP. In an op-ed in the Wall Street Journal, Kasich expressed alarm over the exploding deficit and debt, blaming it, wrongly, on the growth of federal entitlements—meaning, mostly, the American people’s earned retirement and health benefits, which they have paid into with payroll taxes.

Since the creation of Social Security in 1935 and Medicare in 1965, Republicans have been eager to end or privatize these programs, which they see as part of a grand socialist plot to weaken America’s capitalist zeal. But the propaganda didn’t sell, both were too popular. So, for at least three decades, the GOP has been trying the indirect approach—scaring us with alarmist rhetoric about their supposedly looming insolvency.

What Kasich and the Republicans won’t tell you is that Social Security and Medicare are, actually, two of the few programs that have a stable, permanent funding source in the form of dedicated payroll taxes. So, any future funding issues could be greatly eased by closing loopholes that let tax-dodging plutocrats successfully claim that their millions are capital gains, not compensation subject to payroll deduction. I suspect we will wait a long time before any Republican makes such a suggestion to address purported funding shortfalls.

The one recent congressional action Kasich pinpoints as part of his polemic against the exploding debt has nothing to do with entitlements: it was the budget deal Congress agreed to in February that addresses programs funded from one year to the next. These are not entitlements—a fact that Kasich, a former chair of the House Budget Committee, should know. A key feature of the agreement was that the Pentagon, which receives half of all discretionary federal spending, received a huge increase. And there lies a major factor in the Republican deception on budgetary policy: military spending, as we shall see.

To understand why the debt has exploded since the start of the century, when there were projections that then $3.4 trillion debt could be paid down or even paid off, it’s necessary to review in detail how this development was fostered by Republicans every step of the way. Three major factors are to blame.

The Bush tax cuts of 2001 and 2003

The Bush administration, abetted by Federal Reserve Board Chairman Alan Greenspan, was itching the moment it came into office to use the budget surplus to reward its rich contributors with tax cuts. Never mind that the stock market had steadily fallen since Bush’s election, signifying that the tech bubble was over and that revenues were contracting.

The 10-year tax cuts, according to most estimates, cost between $2 and $2.5 trillion. When those cuts began to expire during the Obama administration, all but a small portion of the cuts on the top earnings bracket were renewed. Therefore, the total national debt impact of the Bush tax cuts from enactment until 2018 is close to $4 trillion.

Never-ending war

Bush, having been caught flat-footed by the 9/11 attacks, could have responded by treating the tragedy as a critical but solvable problem with limited military counterterrorism actions. Instead, he massively militarized the problem, ladled money to the Pentagon, and invaded the wrong country, setting us up for an even more expensive eight-year occupation of Iraq. The occupation served as an incubator for ISIS and created the rationale for massive DOD spending ever since (to be sure, continued through the 8 years of the Obama administration).

The cost? DOD estimates direct costs at around $1.5 trillion, but that’s a laughable lowball. It excludes debt service, but more important, it leaves out the Pentagon’s spending bonanza that wasn’t direct war funding, but which they would not have received absent the hysteria accompanying the War on Terror. And of course, the newly created Department of Homeland Security became a bottomless money pit. A more realistic estimate of all direct and indirect one-time and recurring costs comes to an eye-watering $5.6 trillion.

The 2008 financial meltdown

Republicans typically blamed homebuyers who signed their mortgages, the Community Reinvestment Act of 1977, or anything under the sun for the housing bubble and resulting economic collapse. But they refused to condemn the main cause: lax financial regulation. A GOP president and Congress—granted, with help from far too many Democrats—set the stage for the blowout: Chris Cox, Bush’s Securities and Exchange Commission chairman, couldn’t find financial irregularities with a seeing-eye dog. And Alan Greenspan, the supposedly independent Fed chairman, became a shill for adjustable rate mortgages.

Once the economy fell off a cliff, tax revenues from both wages and investments plummeted and government expenditures (such as unemployment, food stamps, and economic stimulus, in addition to the direct cost of government bailout measures) soared. No one has attempted a comprehensive estimate of the effect on the debt of the Great Recession, probably because the uncertainty is so large. But simply by calculating the rapid rate of increase of the debt-to-GDP during the recession period, the housing bubble’s national debt impact of roughly $4 trillion is not far off the mark.

The picture will only continue worsen in the future: a month before passing the budget agreement that Kasich denounces, Congress approved Trump’s tax cut bill, which he somehow forgets to mention. This bill, which achieved the difficult feat of being the first tax cut in history that was not popular with the public—since it was so blatantly skewed to the rich—will add nearly $2 trillion to deficit over the decade, according to the Congressional Budget Office.

For all his anti-Trump rhetoric, Kasich’s beliefs are entirely within the scope of today’s Republican policy in matters that count. It is now unshakeable GOP orthodoxy—as rigid as its views on abortion or union-busting—that tax cuts pay for themselves; Pentagon spending doesn’t count; and Wall Street, when its actions cause a national calamity, deserves a mulligan while the rest of us should shut up and pay up.

It’s time for the media to stop the ruse and reveal Kasich’s crackpot ideology for what it really is. It became evident to me when I worked in Congress that on important, but technical, matters, the media was a credulous stenographers rather than skeptical investigators. Since I retired, it has only gotten worse: evidently, lecturing the nation about the necessity of politeness toward Sarah Huckabee Sanders is a more urgent topic for the press than what is happening with the public’s money. As Gore Vidal said, “The only subject that a mature people in a so-called republic should be interested in is who collects what money, to spend on what, for whom.”

Mike Lofgren

Mike Lofgren is a former career congressional staff member who served on the House and Senate budget committees. His latest book is The Deep State: The Fall of the Constitution and the Rise of a Shadow Government.