NYY - Republicans have forgotten they hate deficits

WASHINGTON — Since the 2008 financial crisis, conservative economists and Republican politicians have claimed several policy errors were holding back economic growth and contributing to a painfully slow recovery, including lackluster wage growth. The government was spending too much, it was borrowing too much and it was sowing “uncertainty” in the business world with expiring tax cuts and other bitter policy battles, they said.

If Republican leaders still believe that, they’re not acting like it.

In a year of controlling power in Washington, President Trump and Republicans in Congress have run up federal spending, approved deficit-swelling tax cuts and presided over a marked increase in “policy uncertainty” in the economy. They still talk about the importance of fiscal discipline, but they have yet to enforce it.

The $4.4 trillion budget Mr. Trump released on Monday spends as much over 10 years as any budget offered by President Barack Obama, whose policies Republicans blamed for ballooning the size of the federal government and hobbling the economy. It does not attempt to achieve balance at the end of that time, despite optimistic economic growth projections that far exceed what most economists say is possible.

Instead, it projects that deficits will grow $7 trillion over the next decade as the United States continues borrowing huge sums of money — a number that could double if the administration turns out to be overestimating economic growth and if the $3 trillion in spending cuts the White House has floated do not materialize in Congress.

The promised $3 trillion in nonmilitary spending cuts do not appear to be high priorities for the president or Republican leaders. A key proposal for self-imposed fiscal restraint, the so-called “two penny plan” that would reduce nondefense discretionary spending by 2 percent a year, is a holdover from last year’s budget proposal. Americans have heard almost nothing about it from the White House in the intervening year. Mr. Trump has talked a bit more about his “welfare reform” ambitions to help cut federal costs but, again, has not mounted a serious pressure campaign to urge Congress to enact them.

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