No wonder Trump’s businesses went bankrupt

There’s a parable about a boy who murders his parents, then during his trial, asks for leniency because he’s an orphan. That perfectly describes the Republicans’ thinking about the deficit. First they cut taxes for the richest Americans and significantly increase military spending, which causes a huge budget deficit, but say that doesn’t matter. They then say the deficit hurts the economy, so to reduce the deficit, they must cut entitlements such as Social Security, Medicaid, Medicare, and safety net programs including food stamps and rental assistance.

That’s the plan Republicans have followed for decades. At the World Economic Forum in Davos, Switzerland, last month, Trump suggested he would be willing to consider cuts to safety net programs such as Medicare to reduce the federal deficit if he wins a second term, a change from his 2016 campaign promise to protect funding for such entitlements. In fact, his proposed FY 2021 budget includes a list of deep cuts in student loan assistance, affordable housing efforts, food stamps, and Medicaid.

Last month, the non-partisan Congressional Budget Office (CBO) issued another warning that the rapidly increasing national debt puts the federal government on a dangerous fiscal path; it was $19 billion when Trump took office; it’s now more than $22 billion. (Remember, candidate Trump promised to eliminate the national debt.)  The budget deficit has ballooned to more than a trillion dollars under Trump from less than $600 billion in Obama’s last year. The CBO projects that deficits will average $1.3 trillion every year in the coming decade, while the economy settles into steady but sluggish annual growth in GDP of 1.5 percent, a far cry from Trump’s promised 4 percent.

It’s not inherently bad for the federal government to borrow money; extra spending by the government can stimulate the economy during a downturn.  Ironically, Republicans opposed Obama’s stimulus program to increase federal spending to help end the Great Recession of 2008 because it would add to the national debt.  But these same Republicans had no problem blowing a hole in the budget when they cut taxes – and federal revenue – drastically and irresponsibly in 2017. The cuts were sold as a way to trigger a sustained surge in economic growth; instead, GDP rose only briefly.

The economy is doing well now mostly because of deficit spending – Trump’s stimulus program in all but name. However, as a result, CBO projects that the fastest growing item in the federal budget will be interest payments – now $479 billion a year – on the rising debt, money spent that provides no tangible benefit for Americans while leaving less money for programs that do. We need to increase revenue by reversing the 2017 tax cuts which mostly benefited the wealthy and large corporations.

Health care costs and the needs of an aging population will always be significant items in the federal budget. Medicare and Social Security do not go through the appropriations process because, as monthly pension payments and medical insurance, they must pay what is owed, not what Congress chooses to spend. Nevertheless, Trump’s proposed FY 2021 budget would take $850 billion from Medicare, $920 billion from Medicaid, and $30 billion from Social Security over the next decade through administrative changes which will undoubtedly reduce services for the beneficiaries. 

Although Congress, not Trump, decides how much is appropriated for safety net programs, we know what many Republicans think of these programs and the people who depend on them. Senator Grassley, for example, justified reducing the number of wealthy families exposed to the estate tax as a way to recognize “the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.” Senator Hatch said, “I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.” People like Grassley and Hatch have bought into three myths about the safety net: 1) people who receive public benefits are “takers” rather than “makers;”2) low-income Americans don’t deserve a helping hand; and 3) government assistance is a waste of money and doesn’t accomplish its goals.

Slashing safety net programs to pay for the GOP tax cuts would redistribute wealth in the worst way, from the disadvantaged to the well-to-do. The right solution to the problem of deficits is to hold back on wasteful military spending and roll back Trump’s tax cuts.

The late Senator and Vice President Hubert H. Humphrey once said, “the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy, and the handicapped.”

Mark Berg is a community activist in Adams County and a proud Liberal. His email address is MABerg175@Comcast.net.