In March 2015, just after a newly sworn in Congress had celebrated the GOP re-taking the Senate by passing a budget that blew through the spending discipline of the previous four years, Mick Mulvaney, then a leading fiscal conservative in the House of Representatives, wrote a Wall Street Journal op-ed under the headline: “The Republican Budget Is a Deficit Bust.” In it, the House Freedom Caucus member complained that, compared to the hold-the-line days of 2011, “debt and deficits” were now “passé,” and stated uncategorically that “There is no honest way to justify not paying for spending, no matter how often my fellow Republicans try.”
Well, at least he warned us.
This weekend, Mulvaney, now director of the Office of Management and Budget, went on Fox News Sunday to defend President Donald Trump’s framework for tax reform. Host Chris Wallace pointed out that many analysts believe Trump’s plan would blow a bigger hole in the national debt. “Now, back when you were in Congress, you were a deficit hawk,” the anchor said. “What happened, sir?”
While the real answer seems obvious enough—the GOP’s fiscal discipline is forever in inverse proportion to the amount of power it holds—watching Mulvaney swap spending-cuts hardassery for the fairy dust of economic growth is still a marvel to behold:
I’ve been very candid about this. We need to have new deficits because of that. We need to have the growth, Chris. If we simply look at this as being deficit-neutral, you’re never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth. We really do believe that the tax code is what’s holding back the American economy. […]
Growth really is what’s driving all of this, and growth is what our focus is, which is why we’re willing to accept increased short-term deficits in exchange for that long-term payoff. […]
Without 3 percent growth, Chris, you’ll never balance the budget at 1.8 percent growth again. And as the budget director—you asked me an opening question, what happened to me? Why am I, why am I now interested in deficits? The only way you balance the budget in this country long-term is through sustained economic growth. And that’s what everything we are doing in this administration is aimed at that end goal.
Mulvaney does make some good noises in the interview about the administration’s vigorous regulatory work, on which he is a key player. But his abject surrender on spending cuts, coming after a month of debt ceiling hikes, $700 billion defense bills, hurricane blank checks, and ominous debt milestones, is emblematic of what his old Freedom Caucus pal Rep. Justin Amash (R-Mich.) means when he says, “It’s looking as bad as any time I’ve seen since I’ve been in Congress.”
Tax cuts and regulatory reform in isolation can indeed spur growth. But do you know what dampens the stuff? Debt. That’s why observers such as National Review‘s Kevin Williamson call Mulvaney’s baby “An Anti-Growth Tax Cut,” remarking: “Republicans want to cut taxes by $1.5 trillion — while the government already is running a deficit — and they propose to offset those cuts with wishful thinking.”
Mulvaney used to be a leading realist in the face of such Beltway fantasia, but now he’s been reduced to being Trump’s Freedom Caucus arm-twister on budget gimmickry, Obamacare revamps, and even reviving the long-hated Export-Import Bank. As he wrote in his Wall Street Journal piece just 30 months ago, “Because of the hard decisions that defense hawks and deficit hawks had made together, Republicans were gaining the moral high ground on spending. Last week we lost it, and it will be harder to regain the next time.” No kidding.
Some related Reason headlines:
* “The GOP’s New Tax Plan Proves Republicans Never Cared About the Federal Deficit“
* “Politicians Will Disappoint You“
* “Trump Budget: The Return of Rosy Scenario?“
* “Hey Libertarians: Prepare To Be Disappointed in Trump’s 10-Year Budget Plan“
And from the video division, “Why We Need To Shrink the National Debt, And Fast!“
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