President Donald Trump wants to rebuild the nations roads and bridges, boost military spending, slash taxes and build a great wall. But Republicans on Capitol Hill have one question for him: How the heck will we pay for all of this?
GOP lawmakers are fretting that Trumps spending requests, due out in a month or so, will blow a gaping hole in the federal budget ballooning the debt and undermining the partys doctrine of fiscal discipline.
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Trump has signaled hes serious about a $1 trillion infrastructure plan, as he promised on the campaign trail. He also wants Republicans to approve extra spending this spring to build a wall along the U.S. southern border and beef up the military the combined price tag of which could reach $50 billion, insiders say. And thats to say nothing of tax cuts, which the presidents team has suggested need not necessarily be paid for.
Trump, meanwhile, has made clear he has little interest in tackling the biggest drivers of the national debt: entitlements. Republicans have been yearning to overhaul Medicare and Social Security for decades.
Even without Trumps pricey wish list, the nonpartisan Congressional Budget Office estimates the $19.9 trillion debt will grow by a further $9.4 trillion over the next decade if nothing changes.
I dont think you can do infrastructure, raise defense spending, do a tax cut, keep Medicare, Medicaid and Social Security just as they are, and balance the budget. Its just not possible, said Rep. Tom Cole (R-Okla.), a senior member of the House Budget Committee. Sooner or later, theyre going to come to grips with it because the numbers force you to.
Trumps staunchest allies in Congress counter that the president deserves some leeway to get something tangible done on jobs.
If there is a temporary increase in the deficit to get our economy growing, I think my fellow Republican members are willing to look at the long game, said Rep. Chris Collins (R-N.Y.), a Trump loyalist. A growing economy and growing our way to success and financial stability is what we want to see.
The contrasting views foreshadow a clash between adherents to Trumps big-spending populism and classic small-government conservatives. Republican lawmakers have to choose between embracing Trumps expensive agenda or pushing back and risking his wrath.
Hill GOP insiders on both sides of the Capitol told Politico the fiscal 2018 budget will easily be one of the toughest votes Congress takes this year. Thats especially true in the House, where the conference for years has rallied around budgets that balance in 10 years the gold standard for whether a fiscal blueprint is conservative enough. Now, many Republicans worry they wont get there because of Trumps unorthodox views on spending.
It was already going to be a herculean task in making the numbers work over a 10-year time frame; when you begin to add in transportation, walls, tax cuts, it becomes an impossible task, said Rep. Mark Sanford (R-S.C.). Were at the cusp of moving in the wrong direction. Its a problem.
Meanwhile, some Republicans on the House Budget Committee are floating the idea of changing the standard of success for a budget. Budget vice chairman Todd Rokita (R-Ind.) has been speaking to members about ditching the 10-year-balance metric for one that focuses on a debt-to-GDP ratio. Supporters of the idea say it would paint a more accurate measure of the nations long-term fiscal situation anyway, as savings from entitlement reforms arent often realized until the second decade and beyond not in the 10-year budget window.
The challenge to balance is going to be more difficult than ever. Thats all I have to say, Rokita said outside the House floor last week when asked about his proposed standard.
Spokesman William Allison said in a statement that Budget Chairwoman Diane Black (R-Tenn.) is committed to working towards a balanced budget.
The White House in the next two months will send Congress two major requests for money: a military spending bill that would take effect immediately upon passage, and a budget for next fiscal year. The latter will be a particularly tough lift because it traditionally includes a projection of government spending and debt over the next few decades.
Republicans are crossing their fingers that any requests for new spending will be offset with cuts. If not, the House Budget Committee will have to craft legislation to raise spending caps that have been in place for years. That could face stiff opposition from conservatives.
We would have several people opposed to lifting the caps, said Freedom Caucus Member Ral Labrador (R-Idaho). I am a fiscal conservative, and the biggest issue were facing in America right now is our debt. As Republicans, we better be consistent on this or were going to lose our base.
Outside conservative groups would also revolt if Republicans did away with the spending limits. Tim Phillips, who leads the Koch brothers-backed Americans for Prosperity, said discretionary spending has grown far too rapidly. We have to put a hard cap on growth, and if Republicans are going to be true to their rhetoric, they will agree to a hard cap on spending.
Trump also wants to slash taxes, which could reduce the amount of annual cash flowing to the Treasury. Republicans are concerned because they have few specifics on what kind of tax plan Trump wants and some administration officials have floated the idea of not paying for tax reductions. House Speaker Paul Ryans tax plan would be revenue-neutral, or not add to the deficit, but no one knows for sure what the final deal negotiated by Trump and congressional Republicans will look like.
Former Senate Majority Leader Trent Lott, a lobbyist who worked closely with Trumps transition team, said many of his corporate clients are lining up to oppose one of the biggest pay-fors put forward by Ryan: a new tax on imports, which the speaker estimates would generate $1 trillion.
The border adjustment tax is giving my clients serious heartburn. A lot of American companies, the poultry industry, the automobile industry, many others are worried about that, Lott said.
Republicans expect their leaders to argue that any spending, whether through appropriations or tax cuts, would ultimately pay for themselves by growing the economy by record amounts. Still, theyre not sure if that will get them to a balanced budget.
Rep. Charlie Dent: I certainly hope that we dont try to reconcile these increase expenditures on the backs of the discretionary programs." | AP Photo
Its possible some Republicans will seek to offset new spending with cuts to discretionary spending programs like the National Endowment for the Arts or agriculture programs something that worries many House Appropriations members like Rep. Charlie Dent (R-Pa.) .
I certainly hope that we dont try to reconcile these increase expenditures on the backs of the discretionary programs, he said.
Appropriators generally believe there is not enough fat to cut from discretionary programs to finance the level of new spending Trump is talking about. Most Republicans would rather turn to entitlement programs to find savings, but Trump has made clear he has no interest in going there.
Republicans are banking on outgoing Rep. Mick Mulvaney (R-S.C.), a fiscal hard-liner tapped by Trump to lead the Office of Management and Budget, to sell the president on the merits of entitlement reform.
I do know Mick Mulvaney knows the reality behind the numbers, Cole said. But Mick doesnt get to make the final call, thats the president. Its going to be fascinating.
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Hill Republicans quake at Trump's budget-busting wish list - Politico