Budget directors are a different sort of Washington creature. Simply put, we like telling people what they don’t want to hear. And in Washington, one thing people never want to hear is “no.”
In contrast, House members, senators and presidents — everybody who gets elected — absolutely love telling people “yes.” In fact, they like it so much, they’ve borrowed $34,000,000,000,000 so they can keep doing it.
So, looking at that federal debt, here’s a question from a former budget director that no one wants to hear: When are taxes going up?
Don’t get me wrong. I don’t want them to. But I can do a little math, and I understand a little about how Washington works. And if we are ever going to address the deficit and the debt, taxes will need to go up.
Yes, that sounds like heresy from a conservative Republican. But the bottom line is that right now, voters just want to hear “yes” a lot more than they want to hear “no.” And until that changes — until voters change — lawmakers certainly won’t.
I remember sitting in the Oval Office with a high-ranking Republican going over President Trump’s proposed 2018 federal budget. He said some nice things about my fiscal conservatism, financial competency and good intentions — and then reminded the president that I wasn’t elected. “But you are Mr. President,” he noted. “And you will be running again. And no one in this town has ever lost his job for spending too much money. They have lost it for not spending enough.”
Part of me doesn’t blame him. After all, he’s correct: Voters say they want to spend less (or at least some of them do), but the overwhelming majority of them vote to spend more.
That is primarily because they haven’t been paying for the government they have been getting for most of the last 40 or 50 years. If we raise taxes, maybe then the voters will say “hang on just a second … it costs me what for my government? Maybe it’s time to start spending less.”
Put another way: Make people pay, in full, for the government they are getting, and maybe then they will start demanding less government.
Of course, there is another way: We could just spend less now. But after 40 years of waiting for spending to come down, I think it’s time to admit that that isn’t going to happen.
Ronald Reagan cut taxes, in part as an effort to “starve the beast”; but he signed spending bills that grew government by more than 50 percent over his term in office. And the deficit as a percentage of GDP was bigger every year he was in office than it ever was under Jimmy Carter.
George W. Bush cut taxes, and then signed appropriation bills that grew spending by 75 percent over his eight years. Trump cut taxes. And with then-Rep. Paul Ryan (R-Wis.) as Speaker with a 40+ seat majority at least part of the Trump term, government spending grew nearly 75 percent in four years.
If Paul Ryan isn’t going to reduce spending, what can we expect from House Speaker Mike Johnson (R-La.)?
And while people will cry “Cold War,” “9/11,” “global financial crisis” and “COVID-19,” it always seems we have emergencies that require us to spend more. You could make the argument that now we have an emergency that requires us to spend less. Yet spending is still going up.
Ultimately, Republicans are a lot better at cutting taxes than cutting spending. And if Republicans aren’t going to reduce spending, who is? The Democrats? Come now, please.
Don’t get me wrong. Republicans are correct on economic theory. We won the corporate tax argument: Corporate tax revenues now are higher than they were before the Trump tax cuts. Indeed, they are higher now than they have ever been. The same is true with personal income taxes. The Republican argument that tax cuts can grow the economy, which increases government revenues, even at lower rates has been proven correct again and again.
Simply put: The government has never had so much money. So yes, we do have a spending problem, not a revenue problem.
But being right on taxes all these years hasn’t actually solved the deficit problem.
There is an alternative, of course, which is simply to keep our heads buried in the sand — popping up every now and then to give an impassioned speech about the evils of the deficits — and hoping the problem will go away, while waiting to courageously do the exact same thing we have been doing for the last 40 years: spend more.
The result of that, of course, will be inflation. Serious inflation. Not the recent little bout we had, but 1970s-level stuff when home mortgage rates were 16 percent. In fact, we’ll probably be lucky if that’s as bad as it gets.
In fact, as doing the same thing we’ve always done — and still saying “yes” to everyone — is the path of least resistance, the odds are that is the way D.C. is going to go.
That said, inflation is a tax in and of itself. So, taxes are going up, one way or the other.
My only question is: When?
Mick Mulvaney, a former congressman from South Carolina, is a contributor to NewsNation. He served as director of the Office of Management and Budget, acting director of the Consumer Financial Protection Bureau and White House chief of staff under President Donald Trump.
