The new Republican House majority is gearing up for a fight on escalating spending and deficits. This enthusiasm is commendable but early indications suggest they may repeat the same mistakes that have doomed previous attempts to rein in spending. Rather than offer a realistic plan to modestly cut spending and build momentum for larger reforms, many Republican lawmakers are making implausible demands to quickly cut trillions of dollars and balance the budget. Rather than portraying spending restraint as responsible and non-disruptive, many Republicans are threatening a debt limit showdown that will only anger voters and ultimately fail to win real reforms. Rather than do the hard work necessary to design and build support for specific reforms, many Republicans are relying on stale talking points and gimmicks totally detached from fiscal and political reality.
As inflation rages and the economy weakens, Washington ran a staggering $7.2 trillion in budget deficits the past three years. Annual deficits are likely to surpass $2 trillion within a decade even with peace and prosperity—and approach $3 trillion if interest rates continue rising. Yet, for too long, “spending restraint” has been merely a Republican talking point.
Paradoxically, getting serious on spending means scaling back the amount of promised spending reductions. Rather than performatively promising unrealistically bold savings that will be discarded as unpassable, serious lawmakers should offer more modest and plausible savings targets and then actually follow through. A Congress that enacts $400 billion in 10-year spending cuts is more fiscally responsible than one that promises to balance the budget within a decade, shuts down the government, brings a public backlash, and ultimately enacts nothing.
The classic challenge for fiscal conservatives is that, while restraining spending and deficits is broadly popular—so are most federal programs. Over the next decade, Social Security, Medicare, Medicaid, defense, veterans’ benefits, and interest payments will account for 75 percent of federal spending. And Social Security and Medicare shortfalls—projected to top $100 trillion over three decades—will drive nearly 100 percent of rising deficits over the long-term. Unless Republicans are prepared to significantly and immediately pare back those popular programs, the ambitious calls for a balanced budget or trillions of dollars in short-term spending cuts are just empty rhetoric.