Last month House Budget Chair Paul Ryan (R-WI) repeatedly warned of a coming “debt crisis” in a speech justifying his budget’s steep cuts to programs that benefit the middle class and poor.
On Friday those warnings were nowhere to be found when nearly every Republican voted to permanently revive a research and development tax break for businesses. It was the first of six business-backed “tax extenders” approved in committee and expected to pass the House, worth a total of $310 billion. All unpaid-for.
That means the package would add $310 billion to the national debt.
The move reflects the irony of the GOP’s posturing as the party that is dedicated to bringing down the debt, a campaign theme that helped them storm back to power in the House in 2011. When it comes to cutting spending, the debt is a dire problem. But when it’s time to cut taxes (or for that matter, spend more on the military) the party’s debt concerns tend to disappear.
USA Today’s editorial board chided GOP leaders for their double standard. “[Fiscal] discipline only goes so far. House Republicans have declared that when it comes to offsets, tax cuts don’t count — budget be damned,” it wrote before Friday’s floor vote.
The opportunistic invocations of fiscal responsibility have served two important purposes for Republicans: they undermined President Barack Obama’s credibility and weakened or defeated many of his key economic initiatives. The “debt crisis” warnings were particularly useful to Republicans in 2009 and 2010 when Democrats had unified control of Washington.
In a flipping of the script, it was House Democrats, concerned that the unfunded tax extenders would cramp up budget space for some of their priorities, who were quick to make charges of hypocrisy and insist on adhering to the pay-as-you-go standard that Congress has mostly stuck to during Obama’s presidency.
“It’s not only fiscally irresponsible, it’s also hypocritical,” said Rep. Sander Levin (D-MI), the ranking member of the tax-writing Ways & Means Committee.
The White House has threatened to veto the $156 billion R&D bill, warning that “making traditional tax extenders permanent without offsets represents the wrong approach.” In the Senate, Finance Chairman Ron Wyden (D-OR) wants to resurrect the tax breaks for two years — without an offset, but at a much lower price tag — hoping to buy time for a permanent solution in tax reform.
A senior House Republican aide defended the GOP’s push to pass the tax extenders without a pay-for, pointing out that the R&D tax credit has consistently been renewed since 1981 and that Democrats have cast many votes for tax extenders without offsets. The aide affirmed the GOP’s preference that tax cuts be permanent so as to give employers “certainty.”
“We shouldn’t have to increase taxes to keep the tax code the way it is today,” said the GOP aide, who wasn’t authorized to speak on the record.
It is ultimately a question of priorities, and both parties tend to use deficits as a cudgel to protect their own. In this case, Republicans believe tax cuts (particularly for upper earners and businesses) top the priority list, while Democrats worry that adding $310 billion to the debt narrows the space for them to protect middle-class programs or spend more on education or infrastructure.
An important difference is that Democrats consistently dismiss warnings of an impending debt crisis, whereas Republicans continue to sound the alarm when it suits their immediate needs and ignore it when it doesn’t.