By Jon Dougherty
(TNS) An op-ed by CNBC pushes back against the Democrat-led narrative that rising government debt is the fault of a major tax cut passed in December 2017 by a congressional Republican majority and signed by President Donald Trump.
In a post to the network’s website, Jake Novak pointed out the obvious: Despite the fact that government revenue is rising, so, too, is the debt, meaning Congress is still spendingÂ too much money.
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President Trump never comes off as the humble type. But thereâ€™s a major policy success that he and his fellow Republicans havenâ€™t spent enough time touting: The increasing tax revenues that have been pouring into the federal treasury,” Novak writes.
Just as they did when Ronald Reagan cut taxes while at the same time turning the American economy loose, the Trump economy is experiencing so much growth that tax revenues are actually higher than when they were, per capita, before the cuts.
This, despite Democrats’ doom-and-gloom predictions that revenues that were a ‘gift to the wealthy’ would tank and leave Uncle Sam broke and desperate.
He’s not; far from it, as Novak points out:
The numbers donâ€™t lie. Federal tax revenueÂ soared to a record $806.5 billion in the first three months of fiscal 2020. That continues the trend of record tax revenues that have been coming into the Treasury over much of the last two years.
These results are the strongest argument that tax cuts do indeed grow the economy in a way that widens the tax base and ends up bringing in more money to Uncle Sam in the end.
But hereâ€™s the problem: deficits are still going up. In fact weâ€™re back on a pace to hit a $1 trillion deficit this fiscal year for the first time since 2012. You donâ€™t have to be Sherlock Holmes to figure out that if tax revenues are surging and the debt is still rising, then the culprit for all the red ink has to be increased government spending.
Sure enough, federal spending also hit a record $1.16 trillion during this past fiscal quarter.
Novak notes further that the 2020 Trump campaign and Republicans in general are missing a political opportunity here. Two of them, in fact.
Heading into an election year, the Garbage Party — which has never cared about deficits and was more than happy to help Barack Obama double the national debt during his two terms in office — will hit Republicans and the Trump administration over the rising debt.
It’s an argument that is liable to resonate because the GOP has been the party preaching fiscal responsibility for years (though not really living it; George W. Bush and Republican congressional majorities in the 2000s doubled the national debt as well).
The Trump team needs to appeal to the simple logic that if tax revenues are rising, the tax cuts canâ€™t possibly be the reason for rising federal debts. This is simply good political defense, and you can be sure the White House and the Republicans are going to have to play defense very soon.
Trump can also remind voters that his first budget in 2017 contained heap big cuts to entitlement spending and other budget items, but was immediately pronounced “dead on arrival” — and pretty much was DOA –Â despite having Republican majorities in both chambers of Congress.
So, while the president has sought on more than one occasion to cut the budget, he’s been thwarted time and again by spendthrifts in Congress on both sides of the aisle.
The Trump reelection campaign could also cite Democrats’ resistance to his comments this week about considering cuts to entitlement programs.
“The president promised that unlike other Republicans, he wouldn’t touch Social Security, Medicaid andÂ Medicare. He’s already broken that promise and gone after Medicare. Now it looks like Social Security is in the president’s crosshairs as well,” Senate Minority Leader Chuck Schumer (D-N.Y.) said during the chamber’s impeachment trial this week.
Only, Trump has not said which programs he would target. And cutting Social Security would be an impossibility anyway without legislation because it is one of those ‘automatic’ budget line items that Congress has no authority to change (as inÂ defund).
But clearly, Democrats don’t wantÂ any cuts to the budget unless they are coming from defense, as has historically been the case.
The president and Republicans have kept up their end of the national debt crisis by raising revenue via tax cuts that led to remarkable economic growth. The president’s campaign, then, should tout that growth while asking Democrats to help the administration cut spending so as to reduce the national debt…that they’re going to complain about.
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