Get your recording devices out.
The same people who did not say one word about federal debt doubling from $10 trillion to $20 trillion under President Barack Obama are now suddenly fiscal hawks screaming about how bad the GOP tax plans are because they “will explode the federal debt!”
The competing Republican tax plans have a lot of shifting shapes and moving parts but we do know that, in general, both will be scored as lowering future tax revenue intake below projected budget baselines over the next 10 years anywhere between $1 trillion to $2 trillion based on preliminary estimates.
Let’s call it $1.5 trillion.
Which means future debt accumulation will be about $1.5 trillion more than the amount already projected to be added based on past actions, or inactions, of Congress and presidents dating back to at least 2000.
What is the current amount of additional national debt projected by CBO to be incurred based on past decisions, or indecisions, by Congress and Presidents George W. Bush and Barack Obama before the election of Donald Trump in 2016?
$11 trillion. $11 trillion in additional debt was already expected to be added on top of our existing federal debt of $20 trillion whether Donald Trump, Hillary Clinton or The Tooth Fairy was elected president in 2016.
The inaction of Congress and the last two presidents to reduce spending or cut deals to avoid such enormous debt accumulation has been a far greater problem than what the addition of another $1 .5 trillion in debt would be over the next 10 years.
We already have $20 trillion in federal debt today. One day, it won’t really matter if the United States has $50 trillion of national debt simply because the gravitational forces of international finance, accounting and economics will take over and start to make decisions for us in terms of inflation, currency value and interest rates instead of Congress and our president making legislative decisions in our democratic republic as we have done over the past 228 years.
That will be a truly scary moment for every U.S. citizen living at the time.
What can be done to arrest the growth of national debt solely because of these tax reform bills now before Congress?
Remember the health care reform bill that Sen. John McCain deep-sixed with his nay vote a few months ago?
Embedded in that enormous reform bill was between $1 trillion and $2 trillion in federal spending savings over the next 10 years due to the reduction of the subsidies and other federal outlays to prop up ACA exchanges and insurance companies in that massive bill passed in 2010.
Let’s call it $1.5 trillion in savings.
$1.5 trillion in federal ACA savings could be used to offset the loss of $1.5 trillion in tax revenues over 10 years to produce a deficit-neutral status quo budget going forward. With respect to adding on more debt, at least.
If you are a longtime budget deficit hawk or a Johnny-come-lately budget deficit ruffed grouse, you should welcome the chance to pair the tax reform bill with reform of ACA to make sure we don’t add more debt than the $11 trillion we are already on schedule to add on top of $20 trillion our children and grandchildren now owe.
We have to do something about curtailing entitlement spending to start to see any diminution of our national debt.
Boomers and their parents have been great at loading up debt on the backs of our children and grandchildren. Maybe we will have the common sense to stop it beginning with this tax bill.