WASHINGTON - We’ve heard a lot of frightening figures in the last week or so as the Senate approved a tax cut bill that is now in a conference with the House to iron out big differences between the two versions.
The Senate’s plan would cut $1.5 trillion from corporate, business and individual tax rates in a $19 trillion economy whose government spends $4 trillion a year, according to the White House Office of Management and Budget.
Because Congress spends much more than it has in the till, the government is forced to borrow huge sums to cover a whopping $666 billion budget deficit.
If it’s any consolation, OMB estimates that the budget deficit will be around $440 billion in fiscal 2018, raising the total federal debt to $20.24 trillion.
Clearly, our government is living well beyond our means, and digging us deeper into a debt hole that will be passed on to our children and future generations.
In a word, we’re in a fiscal mess that is only going to get worse, until we decide to seriously cut spending by closing nonessential, outmoded, wasteful departments, agencies and other bureaucracies that no longer serve a necessary and useful purpose.
The Trump administration and the Republican-run Congress are well on their way to slaying an inefficient, anti-growth tax code that will unlock investment capital, which will accelerate new business growth, job creation, and higher wages.
Liberal Democrats like New York Sen. Charles Schumer and House Democratic leader Nancy Pelosi still insist that tax rates need to be raised significantly to pay for a wave of new federal spending that will solve all of our problems.
But they tried that for eight, painful years in the Obama administration, without success.
Economic growth rarely rose above a meager 2 percent. Business investment declined. The labor participation rate shrank. Millions of Americans found it hard to make ends meet.
While the GOP’s pro-growth tax cut plan hasn’t been enacted yet, we can already see that it is having an impact on our economy. The Commerce Department reports that the nation’s economy grew by more than 3 percent in the third quarter in anticipation of much stronger growth in the years to come.
Yes, the Congressional Budget Office’s static analysis of the GOP tax cuts forecasts that it will add $1 trillion to the national debt over the next 10 years.
But conservative, pro-growth economists, using dynamic scoring methods, are forecasting a dramatic increase in tax revenues from stronger growth that will sharply lower the budget deficit.
“If the jobless rate is 3.7 percent on Election Day 2018 and wage growth is accelerating (both possible), [it is] tough to sell tax cut as killing America,” said James Pethokoukis, a fellow at the American Enterprise Institute.
But cutting the government down to size to live within the tax cuts’ parameters won’t be easy. It will require skill, leadership, courage and persistence. This is not a job for sissies.
Over the course of my career in journalism, I wrote three books that exposed wasteful spending throughout every level of government. The idea was to pick the worst examples of programs and agencies that were up to their eyeballs in waste, wrongdoing and scandal.
The first book, published in 1974, when I was working for UPI, was titled The Federal Rathole, a term that many of my sources used to describe what was going on in their programs.
“We’re just pouring money down a rathole,” they told me. Examples of waste included $150 million to produce films and monthly magazines touting their agencies; billions in low interest loans to help big companies like Boeing; and $258 million to the Economic Development Administration to give fat grants to economically distressed communities, often with little improvement.
The Wall Street Journal praised the book, saying “it’s not a bad idea…. to keep it handy the next time Congress goes through its periodic charade about economy.”
“As they say, the book’s plot isn’t anything special, but the table of contents is an eye opener.”
In 1980, I took another crack at the federal government, titled “Fat City - How Washington Wastes Your Taxes.” Only this time I expanded my targets to what I called “100 nonessential federal programs” that ranged from “personal chefs for Cabinet secretaries” to $100 million for what I termed “National Science Foundation Low Priority Research.”
Many programs I attacked are gone, but most still exist, wasting our hard-earned money. I remember President Reagan’s budget director, David Stockman, telling me why.
When “you go through these things over and over, and you see how embedded the resistance is — and it’s not just big spending Democrats, it’s the Republican party when it comes down parochial interests — then you realize how insuperable the task is,” he said.
Or as Trump has said many times, “it’s time to drain the swamp.”