House GOP Budget Comes Straight from the Trickle-Down Playbook

(Photo: AP/J. Scott Applewhite)

House Ways and Means Committee Chair Kevin Brady, House Budget Committee Chair Diane Black, House Majority Leader Kevin McCarthy, and House Energy and Commerce Committee Chair Greg Walden participate in a news conference on Capitol Hill on March 10, 2017.

Fresh off Senate Republicans’ botched attempt to deliver tax cuts to the rich by gutting Obamacare and Medicaid, House Republicans have unveiled their 2018 federal budget—a plan in the best reverse-Robin Hood tradition of the Republican Party.

Overall, House Republicans are proposing to balance the budget by 2027 through more than $5 trillion in spending cuts, chiefly to programs that help low- and middle-income Americans, which would allow them to finance a huge military buildup and deliver tax cuts to the wealthy and to corporations. Even with those cuts, their budget requires deliriously rosy economic growth forecasts to come up with numbers showing a budget in balance.

“In past years, our proposals had little chance of becoming a reality because we faced a Democratic White House,” Tennessee Republican and House Budget Committee Chair Diane Black said Tuesday. “But now with a Republican Congress and a Republican administration, now is the time to put forward a governing document with real solutions to address our biggest challenges.”

The proposed $5.4 trillion in federal spending cuts include $500 billion to Medicare (despite President Trump’s repeated guarantees, while campaigning last year, that he’d never cut Medicare) and $1.5 trillion to Medicaid and Obamacare over the next ten years, as well as cuts to essential food subsidy and welfare programs like food stamps (SNAP) and Temporary Assistance to Needy Families (TANF), and to Pell grants for low-income college students. It also assumes that an average 2.6 percent economic growth each year will generate $1.8 trillion in deficit reductions over the next decade.

On the other side of the ledger, the plan calls for increasing military spending by nearly $1 trillion over the next decade, including a $72 billion increase in 2018 alone. That military spending increase blows through the cap put in place by the Budget Control Act of 2011, which can’t be overturned through the budget reconciliation process and thus would need the votes of Democratic senators (which it’s not likely to get).

To get around that obstacle, Republicans on the House Budget Committee want to separate out those budget provisions that would require 60 votes, and fast-track those that don’t—including at least $203 billion in spending cuts for 2018 as well as the tax cuts. Those spending cuts would target food assistance programs, Wall Street regulatory enforcement, and benefits for federal workers.

However, as Robert Greenstein of the Center on Budget and Policy Priorities points out, the budget authors “make clear that the congressional committees charged with producing savings in entitlement programs should strive to cut more than the amount required, and it calls for deficit-neutral tax reform—not revenue-neutral tax reform—which would permit deeper cuts in entitlement programs serving low- and middle-income families to be used to finance tax cuts.”

That is, the cuts could be much steeper than advertised.

The House budget resolution has the ostensible support of Trump. “The administration urges the House Budget Committee, the full House and the Senate to move forward on a pro-growth budget resolution that supports the administration’s goals of a strong national defense, fiscal responsibility, and sustained economic growth,” said Office of Management and Budget Director Mick Mulvaney, who as a congressman was a strict deficit hawk who opposed exorbitant military spending.

The resolution appears to be running into some of the same intra-GOP obstacles that stymied the repeal of Obamacare. It has sparked opposition from mainstream Republicans who say the cuts are too steep, and from Freedom Caucus right-wingers who think it doesn’t go nearly far enough.

Still, as we saw with the House’s eventual passage of the AHCA, Paul Ryan has been able to whip his caucus into line before. The budget resolution will be the linchpin of the Republicans’ ultimate project: paring back entitlements and instituting permanent tax cuts for the donor class.

So count on the GOP to amp up its talking points about the urgency of deficit reduction and the need to make tough choices to rein in out-of-control spending. What they won’t say is that their economic projections of at least 2.5 percent annual economic growth are pie in the sky. Tax cuts will not generate the sustained growth and increased federal revenue they promise, and will end up swelling, not diminishing, the deficit. Whether most congressional Republicans actually believe the trickle-down nonsense they’re saying is unclear. What is clear is that they believe they need to reward the wealthy individuals and corporations that fund their campaigns.  

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

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