It was supposed to be a new era of small government and fiscal responsibility, but the recent budget deal shows this isn’t the case, even with the trifecta of a Republican President, a Republican majority in the House and a Republican majority in the Senate.
Outspoken deficit hawk Sen. Rand Paul (R-Ky.) even went as far to trigger a second government shutdown on February 9 in order to highlight the profligate spending announced in the compromise deal.
On Fox News, Sen. Paul explained the bill would set up a roughly $300 billion increase in the budget caps over two years, borrowing and spending too much money.
“We’re going to bring back Obama era deficits. I was elected to combat Obama era deficits. I remember running for office and saying, we’re going to have trillion-dollar annual deficits. That’s what we’re going to have this year.”
“So, now it’s Republicans in charge busting all the spending caps. And I think part of the reason the markets are so jittery is they worry about the long-term imbalance of government debt. We have a $20 trillion debt. And we’re going to now adding a trillion dollars to it this year because of this spending deal.”
The cap on non-defense spending would lift by $63 billion this year and $68 billion next year, according to Todd Harrison, budget expert at the Center for Strategic and International Studies.
According to Fox News, the agreement also adds $89 billion in overdue disaster aid for hurricane-slammed Texas, Florida and Puerto Rico, increases the government’s borrowing cap and has funding for a range of health and tax provisions.
According to conservative defense news source Breaking Defence, the existing defense spending budget cap would be raised by $80 billion for the current fiscal year (2018) and President Trump has already asked to raised this a further $85 billion in fiscal year 2019
“This deal achieves our top priority: a much-needed increase in funding for our national defense. This deal also increases budget caps, ends the sequester, and provides certainty for the next two years,” said Whitehouse Press Secretary Sarah Huckabee Sanders in a White house briefing.
Loss of BCA means blowouts:
According to the Heritage Foundation, after Republicans grabbed the majority in Congress in 2010, they enacted the Budget Control Act (BCA). In the next few years, spending fell from $3.6 trillion in 2011 to $3.51 trillion in 2014. By 2016, discretionary spending was lower than it had been in 2011. For the first time since the 1950s, the spending binge was brought under control.
But it seems like that era is over. The $20 trillion debt is already headed to $30 trillion in the next 10 years and, the $4 trillion federal budget is expected to exceed $5 trillion within eight years.
Adam Michel, a policy analyst for the Heritage Foundation also notes that the new deal also renews a range of expired tax subsidies or “tax extenders”, further blowing out the budget.
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federal reserve, government spending, united states economy