GOP Fiscal Responsibility Is Always a Bill Away
Republicans keep passing budget-busting bills—and promising spending cuts will come out tomorrow.
STOP ME IF YOU’VE HEARD THIS ONE BEFORE: Republicans are on the verge of finally fixing our out-of-control budget deficits.
But first they need to get just one more unfunded spending binge out of their system—and then (they swear) they’ll get around to that purge.
This is the story we’ve been hearing from supposed fiscal hawks in the GOP about why they have repeatedly voted to jam costly budget bills through the fast-track process known as “reconciliation.” Once a rarely used procedural tactic, reconciliation allows a budget bill to get through with only a simple-majority vote. In recent years, the majority party has typically pulled the reconciliation trick at most once per Congress, when it’s trying to expedite some big, splashy, high-priority measure or a must-pass budget bill; in this Congress, however, Republicans are trying to do it a record four times.
To wit:
Last year, the Republican fiscal hawks were unhappy that reconciliation 1.0 (aka Donald Trump’s “One Big Beautiful Bill”) didn’t have sufficient spending cuts to offset its enormous tax-cut costs. As a result, the bill added more than $4 trillion to deficits over a decade. But Republicans voted “yes” amid promises that their fiscal corrective would come in reconciliation 2.0.
Then, this year, reconciliation 2.0 had no spending cuts, only $70 billion in new spending for Trump’s deportation machine. The Republican fiscal hawks were again unhappy. But they voted “yes” anyway, when promised that fiscal probity would come in reconciliation 3.0.
We are today on reconciliation 3.0. Still no spending cuts, or other forms of deficit reduction.1 And yet again, the Republican fiscal hawks in the House said they were unhappy. Some, like Rep. Eric Burlison (R-Mo.), demanded pay-fors as a condition for their votes. Rep. Warren Davidson (R-Ohio) declared the budget resolution “DOA,” saying that there was “no path” to passage without some sort of offsets.
Lo and behold, no offsets materialized, yet still somehow a path was found: Leadership promised that spending cuts would come in . . . reconciliation 4.0.
“We’re right now looking at a reconciliation 4.0 to do the things that are left out of this one,” Majority Leader Steve Scalise said last week, right before nearly every member of his conference2 voted for reconciliation 3.0.
While the budget resolution for reconciliation 3.0 ultimately sailed through the House, it does appear to be at an impasse in the Senate. That’s in part because some Republican senators are demanding it be paid for. Sample objection, courtesy of Sen. Bill Cassidy (R-La.): “Obviously our country is having a problem with deficit spending, so it should be offset.”
We’ll see how long this professed commitment to fiscal discipline lasts.
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AS I MENTIONED, IT’S UNUSUAL to have this many bites at the reconciliation apple, at least in one Congress, though theoretically the rules have always allowed for an unlimited number of reconciliation bills (at least with enough technical machinations). There have been only a handful of times over the past forty years that two reconciliation bills have passed in the same Congress, and just once has a Congress (the 97th, back in the early 1980s) passed three, according to the Congressional Research Service.
Four would be a new milestone, and a sign of just how broken our budget process has become. What was once an arcane procedural measure designed as a deficit-discipline mechanism is now one of the primary tools for getting bills through—and for adding billions or trillions to deficits.3
This is hardly the only way the budget process appears irreparably broken. As Congress fumbles its constitutional duty to control the power of the purse, Trump is openly stealing it away.
As Cerin Lindgrensavage and David A. Super explained last week in the Hill, Office of Management and Budget Director Russell Vought has been unilaterally refusing to spend congressionally appropriated funds. His maneuvers are plainly illegal. But Vought is claiming he is empowered by obscure budgetary tools created in the late nineteenth and early twentieth centuries, intended for different purposes, that have remained on the books.4
“He’s throwing all sorts of other monkey wrenches in there, in particular saying, ‘You can’t spend this without prior approval from us,’ and then not answering his phone—figuratively, anyway,” said Super, a professor at Georgetown Law. “That’s how he’s whacked the Smithsonian and a bunch of other stuff he doesn’t like.”
Unsurprisingly, the GOP-controlled Congress is not fighting back.
The reasons why are multifold: Most Republican lawmakers are too spineless to oppose Trump, who might (heaven forbid) withhold his endorsement or sic the MAGA mob on them. To avoid blowback from their own voters, some lawmakers have cut side deals to protect programs in their districts or states that might otherwise be felled by Vought’s axe.5
“Russ Vought cultivates this image as Dr. No and an absolutist and all that, but I think the reality is that he is willing to make just enough deals to have members decide it’s in their interest to play ball,” Super adds.
Indeed, some lawmakers may appreciate having Vought provide them a fig leaf of fiscal rectitude.
But it is just a fig leaf: When you hear that Trumpers are slashing funds for the Smithsonian, Community Development Financial Institutions, USAID, medical research grants, and so on, you might think they are substantially slimming down budgets. In reality, while these cuts will devastate the individual programs themselves, the dollars in question represent pocket change in the grand scheme of federal spending and tax-cut costs. But Trump and GOP lawmakers can still claim to be “saving money” when questioned about their unfunded tax cuts, wars, deportation machine, and farmer bailouts.
And make no mistake: Even if Republicans’ professed concern for the federal debt is disingenuous, the federal debt itself is very much real and very much a problem. Earlier this year, it surpassed 100 percent of GDP. And the cost of managing that debt is growing more expensive, too, given that 30-year Treasury yields just hit their highest level in nearly two decades.
Not to worry; presumably the next reconciliation bill will take care of it.
Ramparts
— The U.S. Bureau of Economic Analysis is reworking how it calculates prices in some parts of the economy, in a manner that is expected to lower official readings of inflation. This will take some pressure off the Federal Reserve to raise rates. Economists suggest there are sound reasons for the methodological change but the optics still aren’t great. Which is what happens when you try to politicize independent statistical agencies: Even legitimate changes start to look suspect.
— Speaking of politicization: The Fed held interest rates steady at its meeting this week, with three regional Fed presidents dissenting because they thought rates should be higher. Unsurprisingly, Trump claimed his newly chosen chair Kevin Warsh (who voted to keep rates as they are) really truly wanted to cut rates but was stymied by a “political board.” Trump’s attack dog Peter Navarro likewise lamented “how much work remains to educate a central bank still too slow to recognize the power of Trumponomics.” Meanwhile markets still widely expect rates to be raised by the end of this year; how will Team Trump react if and when Warsh presides over a rate hike?
— The Trump administration is considering adding a whopping $100,000 fee to the program that allows international students to work for a time after graduation while still on their student visas. This is in addition to a recent regulatory change limiting student visas to four years, regardless of how long an academic program takes. (Most STEM Ph.D. programs, for example, take more than five years.) The Great American Brain Drain continues.
— Diamonds are apparently not forever after all: In 2001, De Beers was valued at more than $18 billion. Today the company is in talks to be sold off for $1 billion.
— W—and I cannot stress this enough—TAF?
— Hmmm: Andrew Crapuchettes, founder of RedBalloon, received an unsolicited message from a State Department official urging him to bid on a contract to help identify (MAGA-friendly) candidates for the U.S. foreign service. RedBalloon won the contract. Just coincidentally, Don Jr. is an investor.
— Tariff revenue turned negative in June, after refunds finally began to flow, thanks to the Supreme Court decision ruling Trump’s tariffs unconstitutional. He is trying to rebuild his tariff wall with other authorities nonetheless.
— More love for my favorite store.
It does call for $3.4 trillion in unspecified “government-wide savings,” which are not allocated to any particular budget function or committee. Okay.
Davidson and outgoing Rep. Thomas Massie (R-Ky.) were the only Republicans to vote against the resolution.
Although budgetmaking via reconciliation bills is hardly the norm, that doesn’t mean that the rest of the time lawmakers are meeting their obligations to debate and pass annual budgets in an orderly and timely way. In recent years, the budgeting process has usually been a matter of brinkmanship over shutdowns. As James C. Capretta wrote in The Bulwark four years ago, “According to the rules now in effect, Congress is supposed to approve separate bills reported by each relevant appropriations subcommittee before October 1 (there are now twelve such bills). Congress has not met that deadline since 1997, and in fact has met it only four times since 1977. The new normal is the late . . . approval of a phone-book length measure, negotiated behind closed doors by a small group of leaders, covering the entire federal enterprise (and often much else besides).”
The “apportionment process” is a tool intended to prevent the government from blowing too quickly through funds Congress has appropriated, and then coming back to lawmakers, hat in hand, asking for more money. It was designed to prevent overspending; instead, Vought is weaponizing it to underspend.
Sen. Mike Rounds (R-S.D.), for instance, had initially opposed measures clawing back funding for public radio and TV, which were at first unilaterally executed by the White House. Then he cut a side deal protecting funds for tribal broadcast stations in his own state, and voted for a rescissions package formally blessing the clawback.
25 years ago, Grover Norquist offered his storied goal for out government, “to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Republican politicians like to claim the title of budget cutters, but the reality has been that whatever programs they DO cut, they tend to cut taxes more, plus add new spending for their own favored programs. So the deficit grows, often more under Republican leadership than under Dems.
So now the deficit seems to be drowning us, or more so our next generations. Perhaps this is the new rewrite of Norquist’s idea: keep enlarging our deficit until it all goes ‘boom.’ Doesn’t seem very orderly or conservative in any way
I used to be a Republican, in part because Republicans could, years ago, be legitimately considered the more fiscally responsible party. That is long gone. Republicans will spend more on their favorite programs and ignore the need to raise revenues; instead they approve irresponsible tax cuts. Their spending cuts do far more harm than offer fiscal responsibility—USAID cuts, for example, directly led to loss of life, reduced U.S. global influence, and “saved” a minuscule amount of money compared to the total federal budget. But it fed their base’s irrational craving to slash foreign aid.
Reconciliation 4.0? What a joke.