Back when Barack Obama was president, congressional Republicans could frequently be heard arguing that both short-term budget deficits and the long-term accumulation of national debt were acute economic problems that needed to be addressed immediately. Debt aversion was a key reason not to stimulate the economy, not even with tax cuts like the payroll tax holiday that expired in 2012 due to GOP opposition.
Today, though, Republican leaders are lining up behind a tax plan that looks sure to increase the deficit, with the money largely flowing to unpopular tax cuts for big business and the rich.
To some critics, it smacks of partisan hypocrisy. But to congressional Republicans themselves, it’s, well, partisan hypocrisy. Via the Hill:
“It’s a great talking point when you have an administration that’s Democrat-led,” said Representative Mark Walker, Republican of North Carolina and the chairman of the Republican Study Committee, a group of about 150 conservative House members. “It’s a little different now that Republicans have both houses and the administration.”
A spokesperson for Walker clarifies to me that he isn’t saying personally that he believes the deficit is just a talking point that should be ditched now that Donald Trump is in the White House, but he does fear that some of his colleagues see it that way — citing the bipartisan debt ceiling deal as an example of insufficient debt fervor.
In truth, even though the national debt is large in absolute terms and projected to grow in future years, there’s little reason to believe it’s a big problem currently. Interest rates remain fairly low, and to the extent that they’re not super-duper low it’s because the Federal Reserve is slowly but surely trying to raise them, even though there’s no sign of inflation. Taking on more debt to finance a tax cut for the rich may not be a good idea, but it’s also probably not going to cause any big problems.
But the benign nature of the debt situation was even more true two or five or eight years ago when interest rates were rock-bottom, unemployment was sky-high, and putting people back to work with new spending or low payroll taxes was absolutely vital.