A Prospect newsletter about the debt limit
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Republican Debt Ceiling Lies

Today's X-Date: GOP members insist they're worried about the
national debt. It ain't true.

 

Francis Chung/POLITICO via AP Images

By Ryan Cooper

**** During the whole of the ongoing hostage negotiation
over the debt ceiling, Republicans have repeatedly claimed that
they're demanding massive spending cuts because the government is
borrowing too much. "They actually want to spend more money than we
spent this year," Speaker of the House Kevin McCarthy recently claimed
<[link removed]>
about Democrats. "We can't do that. We all know how big this deficit
is."

As McCarthy's Republican colleagues make clear, this is, ad nauseam,
the party line. "I have said since I first ran that I would not vote for
a debt ceiling increase apart from the cuts in spending that would put
us on a path to fiscal responsibility," said Rep. Bob Good (R-VA) some
months ago
<[link removed]>.
"The point is that this current debt crisis has been created solely by
reckless Democrat policies and out-of-control spending," said
<[link removed]>
Freedom Caucus chair Rep. Scott Perry (R-PA).

Rep. Ken Buck (R-CO) said he voted against the House Republicans' plan
because it didn't cut the debt

**enough**. "The Republican plan yields $53 trillion in debt, and $53
trillion in debt is unacceptable to me. We go off the cliff at some
point," he said
<[link removed]>.

But all these are bald-faced lies. Republicans do not care even slightly
about the national debt. The last time they had the run of the federal
government, they passed laws that required tremendous borrowing. If and
when they get control once more, they will do the exact same thing.

One obvious piece of evidence here is that the Biden administration has
proposed numerous revenue-raisers as part of the negotiations, only to
be dismissed out of hand. Jeff Stein reports
<[link removed]>
at

**The Washington Post**: "On a phone call last week, senior White House
officials floated about a dozen tax plans to reduce the deficit as part
of a broader budget agreement with House Republicans, including a
measure aimed at cryptocurrency transactions and another for large real
estate investors, two of the people said. They were all swiftly rejected
by the GOP aides on the call, the people said."

If one were legitimately concerned above all with budget deficit, then
it makes no sense to categorically rule out reducing it with more taxes
rather than benefit cuts. A dollar is a dollar either way-and
especially at a time of historically gigantic corporate profits
<[link removed]>, one would think deficit
scolds would conclude that soaking the rich at least a bit should be
part of the program. But one would think wrong.

A supporting piece of evidence here is that Republicans' ransom
demands include rescinding the additional $80 billion in funding for the
IRS passed in last year's Inflation Reduction Act. Funding the IRS not
only greatly improves the agency's customer service-thanks to that
money, phone response time fell by 84 percent
<[link removed]> during the 2023
tax season-it will also more than pay for itself. The Congressional
Budget Office estimated that the new funding will produce a net revenue
increase of $124 billion
<[link removed]>
over a decade.

**Read all of our debt ceiling coverage here**
<[link removed]>

Click to Support The American Prospect <[link removed]>

The reason is that chronic IRS underfunding has led to a collapse in the
audit rate, and hence an enormous "tax gap" of unpaid taxes, largely
among the rich. "Three fifths of the tax gap is due to underreporting of
income by the top 10% of taxpayers, and more than a quarter comes from
the top 1%," writes Vanessa Williamson
<[link removed]>
at the Brookings Institution. "Audits of millionaires have dropped 61%
in less than a decade. For those making more than $5 million, the audit
rate has dropped 87%."

One would think that even for people who don't favor tax increases as
the best way to cut the deficit, making sure that the wealthiest pay
what they actually legally owe would be a good deficit-cutting idea.
But-again-one would think wrong.

The most convincing piece of evidence that Republicans are lying has to
do with the Trump tax cuts. These were basically the only piece of major
legislation the GOP passed under Trump (he did sign the pandemic relief
bills, but they were designed and written by House Democrats), and
despite the usual predictions that they would pay for themselves through
supply-side magic pixie dust, they blew up the deficit
<[link removed]>.

House Republicans didn't include extending the Trump tax cuts in their
debt ceiling ransom note, but Rep. Vern Buchanan (R-FL) sponsored a bill
in February <[link removed]> to make them
permanent, as many of their provisions will expire in 2025. At least 72
other House Republicans joined as co-sponsors, including the Freedom
Caucus's Rep. Perry. McCarthy isn't on that list, but he did endorse
the idea
<[link removed]>
in October of last year.

So it's interesting that the Congressional Budget Office recently
estimated that making the Trump cuts permanent would increase the
national debt between 2024 and 2033 by a whopping $3.5 trillion
<[link removed]>.
Sounds like a lot!

It goes without saying that this report did not change any Republican
views whatsoever. It's absolutely certain that if Republicans win
control of Congress and the presidency in 2024, they will make the
Trump-era cuts permanent, and probably add some more.

This is just the latest in a long pattern of Republican behavior. When a
Democrat is president, they scream and cry about budget deficits,
demanding sweeping spending cuts, and shut down the government or take
the debt ceiling hostage to get them. Those unpopular cuts typically
harm the economy, for which the president and Democrats are blamed. Then
when it's Republicans' turn, they take all the budget headroom
created by the austerity and immediately hand it to their oligarch
benefactors in the form of tax cuts for the rich, blowing the deficit
back up. We saw this cut-and-inflate pattern during the Clinton and Bush
administrations, and again during the Obama and Trump administrations.
We're seeing it again today.

Increasingly, the beneficiaries of this duplicitous two-step include
Republican members of Congress themselves. Buchanan is a wealthy man,
and personally benefited from the Trump tax cuts to the tune of an
estimated $2.1 million
<[link removed]>.
That may be the reason why on the very day the law was signed, he went
and bought himself
<[link removed]>
a multimillion-dollar yacht.

There are many reasons for President Biden to consider executive action
to abolish the debt ceiling once and for all. But a big one is to get
rid of one way that conservatives can punch the American economy in the
solar plexus so they can hand millions of dollars to their donors and
themselves.

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