Saturday, August 11, 2018

Budget deficit keeps growing, GOP's gutlessness keeps showing

"Budget Guy" Stan Collender is back with another column illustrating the weak act that Republicans in DC are pulling as the US's budget deficit continues to grow after their Tax Scam was passed in late December.

Collender notes that the Republicans that run Congress have been ducking any action on dealing with the deficit, even though the Federal Fiscal Year runs out in 50 days. But Collender adds that this tactic will backfire on Paul Ryan and Mitch McConnell before the midterm elections.
House and Senate Republicans so far have been able to avoid talking about the deficit by making a complete mockery of the Congressional Budget Act. Even though Congress is required by federal law to adopt an annual budget resolution (the only legislation all year that compares total revenues with total spending and forces representatives and senators to vote on the deficit), the GOP leadership decided early in 2018 to prevent that from happening.

No budget resolution meant no budget debate. No debate meant no media coverage. No coverage meant Republicans wouldn’t be asked to explain their votes in favor of trillion-dollar deficits when they had previously and emphatically demanded that the federal budget be balanced.

This cleverness will end when Treasury and CBO issue their reports this October in the final days of a fierce election. That will put the GOP’s breach of faith with its fiscal past on full display for all to see, report on, criticize and make snarky 280 character comments about.
And with Friday's Treasury statement for August, it's obvious that the GOP's Tax Scam is blowing up the deficit - just like anyone outside of GOP Bubble World would have predicted.

U.S. budget deficit through July
FY 2017 $566.03 billion
FY 2018 $683.97 billion (+20.8%)

And the reason why is lower revenues, due to the lower tax rates that have been in effect for several months now. On the individual income tax side, the lower withholdings began in Feburary, which means that we have 6 months under these new rates. And we see that, contrary to the claims of Larry Kudlow and other Trump Admin dimwits, the tax cuts are not paying for themselves.

Individual income tax withholdings
Jan-July 2017 $660.78 billion
Jan-July 2018 $642.48 billion (-2.8%)

An even bigger gap is showing up on the corporate side, where tax revenues have tanked since the start of the year due to the huge cut in rates. And as we also found out yesterday, those extra funds being kept by corporations haven't helped wage growth ONE BIT, and they aren't even keeping up with inflation any more.

Corporate tax receipts
CY 2017 through July $146.563 billion
CY 2018 through July $103.953 billion (-29.1%)

Those declines aren't going to change in the last 2 months of this fiscal year. With that in mind, the Trump Administration is supposed to release the year-end budget figures for 2018 in October, as has been done for decades, but they likely won't want to. And while Collender acknowledges that it would be SOP for the Trumpists to hide the report or lie about it, he also thinks Wall Street would bite back and tank the markets. And besides, the CBO will put out their own figures in October that will confirm the large increase in the deficit.
But while it’s possible that the White House could concoct a reason to order the report be held until after the election, Treasury’s Monthly Treasury Statement is expected, used and relied on by Wall Street. Delaying it for obvious political reasons may be a theoretical option but just isn’t likely.

In addition, the Congressional Budget Office has shown no willingness whatsoever to knuckle under to political pressure and so will almost certainly release its own Monthly Budget Review this October no matter what the Republican leadership demands it to do.
Not that there aren't plenty of reasons to boot the Republicans out of power at all levels this November, but their fiscal fraudulence should be near the top of the list.

It's truly amazing how our media refuses to ask the simple question of Wisconsin's alleged budget wonk "Hey Pau-lie, what's going to get cut to pay for your Tax Scam?" They could ask it of every other GOP as well, while they're at it.

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