Follow-up on GOP Tax Cut: Impact of Chickens Coming Home GOP a Nervous Wreck

Chickens coming home to what: SOP for GOP — Blame DEMS

Double dealing and double talking Trump continues on his same merry routine way lying to keep his reality flimflam road show on prime time TV anyway he can, always fluffing himself and his crown jewel legislation: The huge tax cut.

This post closely follows my earlier post here – FYI.

But, now the impact of that huge GOP tax cut: The proverbial chickens are just about home. Story and analysis here from Vox.com:

Republicans, a fact, were once the party of fiscal responsibility. Now they are staring down a ballooning federal deficit, comparable to when the nation was still recovering from the recession. But they’re refusing to acknowledge why: Their huge lopsided tax cut.

For example: The Treasury Department reports that the federal deficit grew to $779 billion this year under GOP control of Congress – that is a 17% increase from 2017, and the largest deficit since 2012, when the country was still seeing the effects of the recession of 2007-2008.

Trump has blamed the spate of devastating wildfires and hurricanes in 2017 that resulted in $306 billion in damages and the need to fund the military, saying: “We had to do things that we had to do” (His interview with the Associated Press).

But the non-partisan CBO says the disaster relief funding increased the deficit by $40 billion in 2018 — less than 5 percent of the deficit. 

The budget deal, which boosted funding to domestic programs and the military by roughly $300 billion over the next two years, makes up for $68 billion in the deficit, about 8 percent.

Defense spending alone increased the deficit by $23 billion — less than 3 percent of the total deficit.

The major reason the deficit swelled this year: Again, the Republican tax cuts.

The CBO has already estimated these cuts will cost $1.46 trillion over 10 years — or roughly $1 trillion when adjusted for economic growth — and increase the deficit by $164 billion in 2018 alone.

The law is projected to add another $230 billion to the deficit next year. Those numbers make any emergency funding for disaster relief or military stimulus look like small potatoes.

Note: Republicans spent decades sounding the alarm about the growing deficit and national debt, which they say will eventually lead to the nation’s economic demise. But when tax cuts blow a hole in the deficit, they run for cover while blaming DEM-linked programs like Social Security and Medicare as the cause and thus must be scaled back – but not their tax cuts.

The deficit, which is the difference between how much tax revenue the federal government brings in and how much it spends, is on track to hit $1 trillion in 2019. The laws enacted in the last year will add $2.4 trillion to the national debt by 2027.

There are two main reasons this is the case:

First, the republicans changed the tax laws, permanently cutting the corporate tax rate by 15 percent and temporarily cutting the individual rates. In 2018, the federal government’s revenue was only up 0.4 percent — one of the lowest growth rates in half a century. According to the Committee for a Responsible Federal Budget, a bipartisan group that advocates for fiscal responsibility, the slow revenue rate is in large part due to the tax bill. Taking inflation into account, federal revenues were actually down between 4 to 9 percent this year because of the tax cuts.

Second, the deficit rose is because the government also increased how much it’s spending. Republicans agreed to a massive budget deal with this year, in order to give the military the biggest funding boost in history. To compromise with Democrats, the budget deal also hiked up funding for domestic programs.

The Committee for a Responsible Federal Budget (CRFB) graphed out the deficit, showing how the tax law (TCJA in the chart, aka the Tax Cuts and Jobs Act) is the biggest contributor to the deficit increases. The federal government came into 2018 with a base level of $515 billion in deficit spending.

Continue at the Vox link above – a good read for sure.

Thanks for stopping by.