Senate Majority Leader Mitch McConnell (R-Ky.) made headlines this week when he suggested that the GOP must pay for its campaign promises, stating his preference for “deficit-neutral” tax cuts and offsets for new spending.
“I think this level of national debt is dangerous and unacceptable,” McConnell told the press at a recent briefing. His comments come at an important time.
As a candidate, Donald Trump frequently made mention of the size of the debt, but some of his more popular proposals threaten to grow it even larger. Analyses of Trump’s proposed tax cuts put the cost between $3 trillion and $6 trillion. Incoming White House Senior Advisor Steve Bannon says he is “pushing a trillion dollar infrastructure plan” and many observers are waiting to see the size of Trump’s actual proposal.
The size of possible proposals is leading many Republicans, including McConnell and even the incoming White House chief of staff, Reince Priebus, to call for offsets. On “The Hugh Hewitt Show” on Wednesday, Priebus warned that “we have to make sure that we balance our budget, that we get into serious deficit reduction, and that we also get to a place where we have long-term debt solutions in mind in everything that we do.”
Serious calls for fiscal restraint should be accompanied by legislative action to ensure deficit neutrality or deficit reduction. The incoming president and Congress should not rely on dynamic scoring or other accounting measures that assume large, positive macroeconomic effects, either. The focus should be on finding offsets in the form of targeted spending cuts or revenue increases. If such offsets cannot be found, the Trump administration should resist the temptation to throw more spending onto the national credit card.
In that regard, it’s worth pointing out that the first act of the new Congress looks like it will be to enact tax cuts through Obamacare repeal while delaying Obamacare spending cuts for an uncertain amount of time.
During the campaign, President-elect Trump at one point characterized himself as the “King of Debt.” The way for him to avoid that title while in office would be to at a minimum heed the principle of “pay-as-you-go.”