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Deficits drive a wedge between Trump and fiscal conservatives

022018 magwhpic-web-web
The budget proposal Trump's White House released days later would raise deficits by as much as $7 trillion over 10 years if enacted.

President Trump’s recent embrace of additional deficit-busting policies, fresh off the passage of tax legislation that could send deficits soaring, has worried fiscal hawks and placed further strain on his relationships with conservatives.

Trump first threw his support behind a bipartisan two-year deal this month that lifted budget caps for both military and non-defense spending. Although he conceded that the deal “forced” Republicans “to increase spending on things we do not like or want,” Trump ultimately argued in favor of the budget agreement because it boosted funding levels for the military.

The budget proposal Trump’s White House released days later would also raise deficits by as much as $7 trillion over 10 years if enacted. And while Congress rarely regards a president’s budget as anything more than a gentle suggestion, some fiscal hawks took the proposal as an admission from the Trump administration that the president cares little for placing limits on government spending.

“This budget puts Trump firmly in company with George W. Bush’s fiscal policies and not Ronald Reagan’s fiscal policies,” said Chris Edwards, director of tax policy studies at the Cato Institute. “Up until now, it was uncertain, actually, where Trump would be on spending and deficits.”

Conservatives had high hopes for the prospects of Trump’s fiscal conservatism earlier in his administration when he appointed Mick Mulvaney, an outspoken fiscal hawk, as his budget director and when the first budget proposal his White House put out last year featured deep cuts.

But Trump’s recent handling of talks about spending caps and the fiscal 2019 budget have exposed his willingness to accelerate spending.

“If you think about over the last couple weeks, as they’ve been negotiating the budget deal, we didn’t hear any kind of hard spending restraint statements from President Trump,” Edwards said.

Some of Trump’s conservative allies on Capitol Hill have bristled over his embrace of towering spending levels, even as they defend his positions on other issues such as immigration.

Rep. Mark Meadows, R-N.C., said this month that Trump had incorrectly framed the budget debate as a binary choice between supporting the military or opposing the entire budget deal.

“Well, the swamp is obviously deeper,” Meadows said during a Feb. 11 appearance on CBS’ “Face the Nation.” “When you look at $300 billion over a 10-year period, it makes even a drunken sailor blush. And the problem with that is the drunken sailor actually spent his own money. We have the government spending yours.”

Other members of the conservative House Freedom Caucus, which Meadows chairs, expressed similar disappointment with the way many Republicans fell in line to vote for a plan that hikes spending as the national debt heads toward $21 trillion.

“I'm concerned that our party was given a pretty big setback last week," said Rep. Warren Davidson, R-Ohio, a member of the conservative bloc.

Kevin Madden, a GOP strategist and former senior adviser to Mitt Romney, suggested fiscal policy could become a key point of contention between Trump and conservatives.

“It's certainly going to continue to be a flashpoint and a test for President Trump's approach going forward,” Madden said. “It's hard to see how he'll ever truly be in sync with fiscal conservatives, though, since Trump has never fastened himself ideologically to fiscal conservatism.”

“Rep. Meadows, for example, has always said he's focused on fiscal restraint. Trump has always said he's focused on winning,” Madden added. “When those approaches have come into conflict, Trump has to bank on his personal appeal with vocal base voters to move enough members his way.”

Trump’s ideological flexibility has long worried conservatives who feared the real estate mogul, who has donated money to Democrats, would abandon their priorities once he had maximized the political advantages he gained from temporarily adopting them.

During the 2016 GOP primary, many conservatives opposed his insurgent candidacy due to his lack of conservative bona fides, and not over the incendiary comments that frequently plunged his campaign into controversy.

On issues from immigration to Israel, Trump has largely stood by the conservative promises he used to win the presidency.

But some budget watchers saw warning signs stretching back to the debate over tax reform, when few Republicans even mentioned coupling the cuts with a reduction in spending that could have offset potential revenue losses.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said many Republicans “lost a lot of credibility” when pushing for tax cuts last year that would raise deficits, noting those same Republicans may now find it difficult to argue against budget plans that would have similar effects on deficits.

“It shouldn’t have been tax cuts paired with massive exaggerations about how they would magically not create deficits,” MacGuineas said.

The combination of the tax cuts and the spending bill has paved the way for “eye-popping” deficits in the months and years ahead, MacGuineas said. And Trump’s reluctance to consider entitlement reform has ensured changes won’t be made in the areas that could most soften the blow, she added.

“I don’t think the fiscal hawks in Congress have a lot of political leadership right now,” MacGuineas said.

Still, some Republicans have defended the president’s acceptance of higher spending levels as a necessary evil to continue the progress that has led to economic growth under his leadership.

Sen. John Cornyn, R-Texas, said Republicans haven’t collectively given up on lowering the national debt just because they voted for a spending caps deal that would exacerbate the problem in the short term.

"I'm hopeful we can come up with a bipartisan approach to dealing with the deficits and debt,” Cornyn said on Feb. 13. “It's irresponsible not to do so, but I don't think that was the time to do it."

Alice Stewart, Republican strategist and former communications director for Sen. Ted Cruz, R-Texas, said her recent conversations with people close to the House Freedom Caucus have indicated that conservatives are not conceding the fiscal fight to Trump just because they were unable to stop the spending caps deal from progressing. She said Trump had embraced such a deal because he is focused primarily on the “long term economic benefits” of keeping the government open and funding the military at higher levels.

“Mark Meadows is very responsive to his constituents and the House Freedom Caucus; they fight extremely hard to have fiscal responsibility and limited government,” Stewart said. “[Meadows] acknowledged he didn’t win this battle, but the overall war with regard to draining the swamp and promoting fiscal responsibility is one they’re going to continue to fight.”