“Before the ink is dry on this bill, you can be pushing for $3.5 trillion in business tax cuts,” Representative Gwen Moore, Democrat of Wisconsin, said shortly before the ultimate vote on the Fiscal Responsibility Act, because it is named, on Wednesday.
Those comments reflected a lesson Democrats took from 2011, when Washington leaders last made an enormous show of pretending to care about debt in a bipartisan deal to boost the borrowing limit. That agreement, between President Barack Obama and Speaker John Boehner, limited discretionary spending growth for a decade, helping to drive down budget deficits for years.
Many Democrats now consider those lower deficits gave Republicans the fiscal and political space they needed to pass a tax-cut package in 2017 under President Donald J. Trump that the Congressional Budget Office estimated would add nearly $2 trillion to the national debt. They’ve come to consider that Republicans would happily do the identical again with any future budget deals — putting aside deficit concerns and effectively turning budget savings into latest tax breaks.
At the identical time, each parties have grown more wary of cuts to Social Security and Medicare. Mr. Obama was willing to scale back future growth of retirement advantages by changing how they were tied to inflation; Mr. Biden shouldn’t be. Mr. Trump won the White House after promising to guard each programs, in a break from past Republicans, and is currently slamming his rivals over possible cuts to the programs as he seeks the presidency again.
All of the while, the full amount of federal debt has greater than doubled, to $31.4 trillion from slightly below $15 trillion in 2011. That growth has had no discernible effect on the performance of the economy. Nevertheless it is projected to proceed growing in the subsequent decade, as retiring baby boomers draw more government advantages. The budget office estimated last month that debt held by the general public could be nearly 20 percent larger in 2033, as a share of the economy, than it’s today.
Even under a generous rating of the brand new agreement, which assumes Congress will effectively lock in two years of spending cuts over the total course of a decade, that growth will only fall by just a few percentage points.
Groups promoting debt reduction in Washington have celebrated the deal as a primary step toward a bigger compromise to scale back America’s reliance on borrowed money. But neither Mr. McCarthy nor Mr. Biden has shown any interest in what those groups want: a combination of great cuts to retirement programs and increases in tax revenues.
