WASHINGTON: The Republican Party was once the party of free trade. The party in opposition to substantial budget deficits. Democrats, quite to the contrary, were the big spenders, utterly indifferent to deficits.
Democrats, along with their colleagues in labor, are advocates of tariffs. Tariffs seen to protect American industries and jobs from the free market. Following two years Trump administration we have the imposition of tariffs and trade wars, and our unprecedented deficits. Therefore we must reassess our view of where the two political parties stand when it comes to economic policy.
The changing tide of Government Deficits
In 2010, House Speaker Paul Ryan made this ominous prediction about President Barack Obama’s budget:
“Unprecedented levels of spending, deficits, and debt,” he declared, “will overwhelm the budget, smother the economy, weaken America’s competitiveness in the global 21st-century economy, and threaten the survival of the government’s major benefit programs.”
The deficit, a byproduct of increased spending, significant tax cuts and the inexorable rise of Social Security and Medicare expenditures., is expanding. Congress, with Republican majorities in both houses, failing to contain the expansion. However, today, no one seems to care. Treasury Department reports in October did swell to $779 billion in the 2018 fiscal year. This is up from $666 billion the previous year. But no one seems to really care.
With Republicans in power, it seems, budget deficits no longer concern Republicans.
“The Tea Party wave of 2010 was animated by federal spending, but that has definitely subsided,” said Tim Chapman, executive director of Heritage Action for America, a conservative lobbying group that helped fuel the Tea Party movement.
In Chapman’s view,
“The focus of Trump’s campaign was not on federal spending. He wanted to focus on national security and tax cuts and making America great again. When he said that, a lot of the Republican base went with him.”
Under President Trump, the traditional Republican agenda appears to the new Trump agenda. Rory Cooper, who served as an aide to Rep. Eric Cantor (R-VA), the majority leader in 2011, notes that,
“This is definitely one of the major issues that have transformed the Republican Party under Trump. Free trade, Russia, the deficit, and frankly the size and scope of government have all fallen to the wayside.”
After several years of attempts to reduce the deficit through tax increases and spending cuts, the nation’s debt load is now steadily climbing. Federal tax receipts rose a mere 0.4 percent over the last fiscal year, primarily because of a lower corporate tax rate passed last year by Congress.
Federal spending grew by 3 percent during the same period. Spending will increase over the next decade by $300 billion.
“The evil party and the stupid party got together and called it bipartisan,” said Brian Riedl, a Senior fellow at the Manhattan Institute. “This is the beginning of a long-term avalanche caused by Social Security and Medicare costs that are only going to get worse every year. I project $2 trillion within a decade or $3 trillion if interest rates return to 1990s levels. So, no, the tax cuts will not pay for themselves.”
Therefore, many conservatives are concerned about the Republican Party’s abandonment of fiscal responsibility. Mr. Chapman of Heritage Action says:
“A core part of the Republican brand has been fiscal responsibility. And it is not good for the brand when deficits continue to skyrocket under Republican control. The truth is, conservatives have not sufficiently galvanized the majority of the country around the idea that debts and deficits are a major threat to our country.”
Charles Sykes, the former conservative talk show host in Wisconsin, has known House Speaker Paul Ryan for more than twenty years and had great respect for Ryan’s commitment to limited government, free trade, and balanced budgets. He laments Ryan’s acquiescence in Trump administration policies that have been quite the opposite:
“Even by his own standards, Ryan’s tenure has been a disappointment. I lost count of how many times he came on a radio talk show I hosted in Wisconsin to discuss the looming debt crisis or the need to tackle entitlements. These were the defining issues of his career. That Ryan now leaves office, with trillion-dollar deficits and entitlements untouched is one of the more disconcerting aspects of our bizarre political world.”
Sykes concludes that
“Given Trump’s own indifference to fiscal sanity. Ryan might have had relatively few options. However, the same cannot be said about his silence or capitulation. What would have happened if he pushed back, against the insults, the bullying, the demagoguery? What if Ryan had made the case for free markets, asserted the independence of Congress, defended the United States allies. Instead, Ryan not only hit his tongue but allowed legislative trolls such as Devin Nunes to become accomplices in Trump’s rolling obstruction of justice. History is unlikely to be kind. Of course, Ryan’s harshest critics see all of this as inevitable. But it wasn’t. It was a choice by one of the brightest, most decent and thoughtful political figures of our time. And it was heartbreaking.”
A debt on track to double, triple?
According to the Committee for a Responsible Federal Budget, under current law, the debt would double from 78 percent of gross domestic product (GDP) now to 160 percent by 2050 and hit 360 percent of GDP by 2093. Under a different scenario, that assumes policies like the recent boosts in federal spending and extensions tax cuts, the debt would break a record in just over a decade.
Republicans must ask themselves whether they now want to become the party of unprecedented deficits and abandon their advocacy of free trade. If they do, long after Donald Trump is gone, they will have a hard time explaining to voters just what it is they stand for.
At present, this seems to be the posture most Republicans, with a few honorable dissenters, have adopted. Can this party any longer be viewed as conservative? A question more, and more Americans will be asking.\