The Washington PostDemocracy Dies in Darkness

Opinion The GOP’s One Weird Trick for fixing deficits is a Big Red Flag

The hearing room of the Senate Finance Committee at Dirksen Senate Office Building in D.C. on June 7. (Oliver Contreras for The Washington Post)
4 min

Rosy was bound to show up eventually.

Republicans have promised to balance budgets, but have simultaneously ruled out virtually every mathematical path for doing so. They’re against tax increases (in fact, they’ve backed measures that would reduce tax revenue). They’ve recently pledged not to touch Medicare or Social Security. They won’t cut defense. And they seem unlikely to zero-out every other spending category.

So, they had no choice but ring their old pal Rosy.

Rosy, full name Rosy Scenario, is a steadfast worker whose public service dates back to at least the Reagan era. She has no partisan affiliation, though lately she seems more often to serve Republican officials. Invoking Rosy means, in plainer English, assuming “rosy” economic conditions, typically much faster growth in gross domestic product than most analysts expect.

Lately, Rosy has been mobilized by former Trump administration aide Russell Vought, who has been advising Republican lawmakers about how to prove their fiscal probity. Vought is somewhat of an unusual leader for this task, given that he was budget director for a president who signed an additional $4.7 trillion of debt into law even before the pandemic prompted emergency spending measures.

But Republicans apparently have to take whatever help they can get.

As my Post colleagues recently reported, for several months Vought has been shopping a budget blueprint to Republican lawmakers that promises to achieve the arithmetically impossible: balancing the budget within a decade, without doing anything unpopular (such as amending Social Security benefits).

He’s proposed, for instance, eliminating “woke”-ism from the federal budget. How big is the “woke”-ism line item? Eh, difficult to quantify, but whatever it might tally up to, House Speaker Kevin McCarthy (R-Calif.) has already declared he’s on board with eliminating it. Vought for his part uses the word “woke” 77 times within his 104-page budget document; among the agencies targeted for cuts due to alleged “woke”-ness are NASA, the National Institutes of Health and the FBI.

Vought and other Republicans have also proposed slashing anti-poverty programs, such as food stamps, Head Start and Medicaid. Perversely, while such cuts would likely cause a lot of suffering (and be extremely unpopular), they would do little to close deficits. That’s because these programs represent a relatively small sliver of federal spending.

So: Enter Rosy, stage right.

The most important part of Vought’s blueprint is buried in an appendix table labeled “Economic Assumptions.” It shows gangbusters growth of 3.1 percent this fiscal year alone. For context, that’s more than 10 times the pace of growth projected by the nonpartisan Congressional Budget Office (0.3 percent). Vought’s forecasts for the rest of the 10-year budget window are also well above the CBO’s. He forecasts annual, inflation-adjusted GDP growth of 2.8 percent by fiscal 2032; the CBO has U.S. gross domestic product growth sliding down to 1.8 percent by then.

To the untrained eye, Vought’s proposal probably looks like exactly the special sauce our government needs. Who, after all, doesn’t want a faster-growing economy and the painless fiscal repairs it promises?

But here’s a rule of thumb for evaluating economic plans: The more growth someone promises, the worse their plan is likely to be. That’s because they probably need gangbusters growth to hide the massive deficits that their policies would leave under more realistic assumptions. When a politician or political aide teases One Weird Trick for fixing deficits, know it’s a red flag.

I first proposed this rule of thumb almost exactly seven years ago, when 2016 presidential primary contenders in both parties were offering rival budget plans premised on growth rates of ludicrous speed. Regrettably, this heuristic has remained relevant in budget debate after budget debate since then. Including today’s.

Vought’s deployment of Rosy Scenario is particularly galling though. That’s because of the labor-market legerdemath Vought and his supporters count on to achieve these “Economic Assumptions.”

The CBO (among other independent forecasters) expects a slowdown in economic growth in part because of the country’s demographic challenges: The nation is aging, birthrates have declined and the share of the population that’s working has shrunk. Meanwhile, productivity growth has dragged, too. All this adds up to much slower output growth.

Vought, however, asserts that these demographic challenges will be overcome because working-age people will rush into the labor force — 14.5 million more people than the CBO is expecting by 2032, to be exact.

Where will those 14.5 million new workers come from?

Presumably not via additional immigration, which Trumpists oppose. (More immigration would be helpful in patching up the finances of our retirement programs, though.) Rather, Vought et al. promise to juice the labor force, and therefore the overall economy, precisely through those cuts to safety-net programs. Making poverty much more miserable, they imply, will force more people into desperation and thereby into the workforce.

Who knew Rosy could be so grim?