Sen. David Perdue (R-.Ga) stood on the Senate floor a little more than one month ago and declared that “we have a budget crisis. We have a debt crisis.” Two weeks ago, he wrote in an op-ed that “President Obama’s budgets ignored fiscally responsible principles, instead leaving an ever-growing mountain of debt for taxpayers down the road,” and he urged the United States to pass a balanced-budget amendment ensuring that the government can't spend more than it takes in.
But asked about President-elect Donald Trump's fiscal plans on Wednesday morning, Perdue sounded much less of an urgent note.
“Well, I think there’s a short-term view and a long-term view. What we need is a long-term strategy, and by long-term, I’m talking, you’re going to say, 30 to 40 years to solve this debt crisis eventually,” Perdue said in an interview on CNBC.
"Both parties in Washington have added to our national debt with over $19 trillion today and more than $30 trillion expected in the next decade," Caroline Vanvick, press secretary for Perdue, said in emailed comments. "We are well past the tipping point of our nation's debt crisis, and Senator Perdue will continue to influence the new White House and Congress to solve the debt crisis with a serious sense of urgency."
Perdue's comments on CNBC could be one sign of how the politics of debt in Washington may shift when Trump takes office Jan. 20. Under George W. Bush, the nation's debt exploded with federal spending and tax cuts, often with the consent of Republicans in Congress. But over the past eight years, the Republican establishment has repeatedly excoriated President Obama for plans that don't immediately balance the budget.
Yet Trump's proposals — which include an unprecedented $1 trillion infrastructure spending plan over 10 years and trillions more in tax cuts — would grow the debt far more than under current law, as this chart from the nonpartisan Committee for a Responsible Federal Budget shows.
In one way, then, Trump's economic agenda shares more features with the plans proposed by some liberals, who tend to downplay concerns about the debt in favor of jump-starting economic growth through government spending. (Obama and Hillary Clinton have stressed keeping the debt as a percentage of gross domestic product stable over time, as illustrated in the chart above.)
Trump's infrastructure plan, designed to help reinforce the country’s crumbling roads and bridges and put many Americans back to work, has popular support. In a March Gallup poll, 75 percent of Americans agreed that the country needed more federal infrastructure spending, while only 11 percent disagreed.
This bout of spending would in many ways be the Keynesian fiscal stimulus that some liberal economists have advocated since the recession. But Trump's proposed tax cuts, which would largely benefit the wealthy, are a different story. Trump has proposed more than $5 trillion in tax cuts, including a $1.45 trillion reduction in individual taxes that would largely benefit the wealthy — policies that would run afoul of liberal economists who favor a more progressive tax code.
The Committee for a Responsible Federal Budget estimated in September that Trump’s tax and spending plans would increase the national debt by a stunning $5.3 trillion, to 105 percent of GDP — far above the debt load that Clinton's plans would incur. Trump has said he would find ways to make it deficit-neutral but has not specified how.
Because of dramatic spending cuts in other areas — such as the Affordable Care Act, Medicaid and nondefense discretionary spending — the Committee for a Responsible Federal Budget estimates that Trump's plan could decrease spending and revenue, ultimately leading to a loss in about $5.8 trillion in revenue and a $1.2 trillion cut in spending. Tax cuts and infrastructure spending need the agreement of Congress, of course, but if Perdue is any sign, Trump may find new support for policies that allow the debt to rise.
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