Leaders of the two parties in Congress have agreed to a budget deal that raises discretionary spending a huge $300 billion over two years.
While $300 billion is the headline, the deal may end up hiking spending $1.5 trillion over the next decade as the near-term increases get baked into federal budgets in later years.
The sad irony is that December’s Republican tax cut is supposed to save Americans $1.5 trillion over 10 years. But the new spending is essentially a $1.5 trillion tax hike imposed on people down the road.
The centrist group CFRB summarizes the irresponsibility:
No one who supports this bill can consider himself or herself a deficit hawk or fiscally responsible. … This bill not only reverses the sequester cuts without sufficient pay-fors, it also includes significant further increases in discretionary spending that reverse much of the pre-sequester caps.
And to add insult to injury, it also proposes further spending meant to satisfy everyone’s Christmas list.
Politico notes, “The agreement increases defense spending this year by $80 billion and domestic spending by $63 billion beyond strict budget caps, according to a summary of the deal obtained by Politico. Next year defense spending will increase by $85 billion and domestic funding will be boosted by $68 billion beyond the caps.”
As during the George W. Bush years, the eagerness of Republicans to jack up defense spending has led them to cave in on nondefense spending:
“I’m not going to say every piece of it. But obviously we’re excited about the defense numbers,” said Marc Short, the White House legislative director. White House press secretary Sarah Huckabee Sanders also told reporters the deal accomplished “our top priority,” with the defense boost.
So enjoy your tax cuts while you can because the pressure to repeal them will mount as rising spending pushes deficits over $1 trillion and ever higher levels after that.
Chris Edwards is the director of tax policy studies at Cato.