After joining with Democrats to rush trillions out the door to counteract the effects of the pandemic, some Republicans are now saying that they are back to worrying about deficits — most prominently, Senate Majority Leader Mitch McConnell.
“We haven’t had much discussion about adding $2.7 trillion to the national debt, and the way that could indeed also threaten the future of the country,” the Kentucky Republican said in a recent radio appearance.
Democrats disagree and are seeking an additional $1 trillion in relief aid for state and local governments.
McConnell, though, has said he only wants the federal government to help states with “expenses that are directly related to the coronavirus outbreak,” not wanting to help them ”fix age-old problems that they haven’t had the courage to fix in the past,” such as shoring up troubled pension funds. McConnell has even expressed an openness to allowing states to go bankrupt instead of giving them federal relief, a controversial opinion that received pushback from some Republicans.
The expected federal deficit for this year is soaring, with the Congressional Budget Office expecting that it will total $3.7 trillion, rather than the roughly $1 trillion projected before the pandemic struck. Shock over the unprecedented shortfall is one “charitable” interpretation of the new Republican concern for the rising deficit, said Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, a group that, in normal times, advocates for lower deficits.
A more “cynical” interpretation, Goldwein said, is that Republicans are engaging in “just kind of classic partisanship. The deficit is a problem when it’s for your thing, but not when it’s for my thing. We see that all the time.”
Many Republicans, too, disagree with McConnell.
“The concerns we have about deficit spending now are going to look like a walk in the park,” said Sen. Josh Hawley, a Missouri Republican. “Bold action now to get people back to jobs is not wasteful spending, it’s critical.”
Jerome Powell, chairman of the Federal Reserve, has, in the past, advocated for lowering the trajectory of government debt but favors greater spending now. “This is not the time to act on those concerns,” Powell said during a conference last week. “This is the time to use the great fiscal power of the United States to … get through this with as little damage to the longer-run productive capacity of the economy as possible.”
Brian Riedl, a prominent deficit hawk who has worked for Sen. Rob Portman from Ohio and other Republicans, has said that spending is “unfortunately” necessary.
“Allowing entire industries to disappear and the economy to enter a prolonged depression would cost more than any economic legislation to avert that outcome,” Riedl said in a recent opinion piece.
President Trump, who has been pushing for Congress to start working on another large relief bill, also favors more tax cuts and infrastructure spending. He said last week, however, that he would address the national debt if reelected in November.
Trump economic adviser Steve Moore said the rising debt was a huge political concern for the Republican Party. “Republicans risk splitting their base if they keep spending and spending. Fiscal conservatives who care about the deficit are a big part of the party,” said Moore, who is a columnist for the Washington Examiner.
“It feels like they’re spending trillions like billions, they’re almost losing track of the zeros,” Moore said.
During most of the Trump presidency, Republicans haven’t cared much about the deficit, with Trump adding more than $4 trillion to the debt before the current crisis.
“Essentially, every major debt-increasing legislation we’ve passed so far has been bipartisan or Republican-only, with the Republican-only legislation being essentially just the tax cuts,” Goldwein said, referring to the 2017 Tax Cuts and Jobs Act, which the CBO estimated would by itself add more than $2 trillion to the national debt over 10 years.
