|Why Are These Men Grinning?|
U.S. Deficits Are Exploding
Now that their alarm bells have been replaced by silence, Thune and Rounds have been exposed as the fiscal hypocrites that they are. The budget-wrecking tax cuts they promoted have caused the fiscal year that ended last September 30 to show a deficit of $779 billion, a $113 billion increase (17%) over the prior year's gusher of red ink. Since then things have only gotten worse, with the November deficit the widest in that month's history at $205 billion, nearly 32% higher than a year ago when the November deficit was $139 billion. Typically, Republicans blame the red ink on "entitlement" spending, specifically Medicare, Medicaid and Social Security, but a quick look at the last fiscal year's income and expense statement shows how bogus that argument is. While overall federal spending for the year rose by $127 billion, revenue growth couldn't keep up. Tax collections came in at $202 billion less than anticipated. When your revenues don't grow as fast as your expenses, you've got a problem that no amount of politicizing about entitlements is going to fix. For one thing, even as Senate Republican Majority Leader Mitch McConnell acknowledges, "it's very difficult to do entitlement reform." For another, history tells me that the same can be said about reforming the rest of the federal budget. The only politically realistic way to close the budget gap is finding a way to increase government revenues. The tax cuts tried to do just that, but came up way short.
Crackpot economics gripped the Republican Party a year ago when these tax cuts were hyped, getting a lot of people to believe the long-debunked canard about how those tax cuts actually can pay for themselves with increased collections created by a stimulated economy. Rounds and Thune certainly bought it, completely ignoring Congressional Budget Office warnings during the months before the tax cut debate that continuing deficits would create serious budgetary challenges that could hamper economic growth. So now that those deficit warnings they ignored have come to pass, Thune and Rounds haven't had much to say about them. I have no doubt that when they do, our senators will blame entitlements, not the revenue falloff from the tax cuts.