With its plaintive call for balanced budgets, the fiscal hawk once pervaded Washington. But it’s getting harder to spot one.
That’s because of President Donald Trump, and the equal-and-opposite reaction he’s provoked on the U.S. left.
Trump is proving as indifferent to fiscal orthodoxy as to any other kind. The spending measure on his desk for signing, along with the one approved in March and December’s tax bill, amount to the biggest stimulus outside recessions since the 1960s. They sailed through a House led by the supposedly hawkish Paul Ryan, who’s due to step down in January without much progress on his goal of reining in so-called entitlements like social security -- an illustration of how Republican deficit scolds are in retreat.
On the Democratic side, the reaction that’s firing up the grassroots isn’t “How could you do that?’’ It’s: “Why can’t we do that?’’
How to Pay?
Democrats opposed the tax bill, and party leaders have deplored Trump’s fiscal recklessness. But some Democrats are spinning it differently. There’s always room to boost spending at the Pentagon or finance tax cuts for the rich, goes their argument -- so why not for social programs? “Ever notice how the ‘how do you pay for it’ argument is selectively employed against working class benefits?’’ Alexandria Ocasio-Cortez, a House candidate in New York, tweeted in July.
In both parties, deficit spenders are gaining ground. That makes Year Two of the Trump administration look increasingly like end-times if you are, for example, the Committee for a Responsible Federal Budget.
“The tax cuts really set off a spiral of irresponsible justifications for not caring about fiscal responsibility,’’ says Maya MacGuineas, president of the CRFB. The group gets funding from the Peter G. Peterson Foundation, a project of the late Wall Street billionaire, who advocated slashing social programs to balance the budget.
Markets Shrug
Deficits are supposed to trigger inflation and scare off bond investors. The latter don’t seem too alarmed. Ten-year Treasury yields have edged back above 3 percent, but by historical standards it remains very cheap for the U.S. government to borrow money.
Which is what it plans to do -- in growing quantities.
The deficit is outrunning forecasts by the Congressional Budget Office, which estimated in April that the gap would approach $1 trillion next year. It may not be far off that figure already, reaching $898 billion in the first 11 months of the current fiscal year -- driven by a 7 percent rise in spending. Full-year numbers are due Oct. 11.