House GOP’s first order of business? Balloon the $31 trillion national debt

by Thomas Kahn

Republicans have long claimed they are dedicated deficit hawks, blaming Democrats for growing deficits and debt. But two votes they cast after electing Kevin McCarthy as House speaker prove that Republicans are charlatans when it comes to deficit reduction.

First, House Republicans passed a new rule, called CUTGO, which could cause significant damage to our nation’s fiscal health by adding trillions of dollars in red ink to our public debt.

Then, just a few hours after passing CUTGO, they busted the deficit again by voting to gut the Internal Revenue Service budget. This vote will increase the debt by more than $100 billion over 10 years by encouraging wealthy Americans to cheat on their taxes and avoid paying their fair share. The Republicans took this step despite recent reports that the agency lacks the staff to properly audit Donald Trump and other high-income Americans.

How does CUTGO increase the debt? It permits Congress to pass mammoth tax cuts without paying for a penny of them. That means the cost all gets added to the debt. The House under Democratic control had a rule called PAYGO, which requires offsets — or trade-offs — for all spending increases or tax cuts so that these changes don’t add to the deficit.

The Republicans’ CUTGO alternative changes that long-standing rule so that it applies only to spending, and not to taxes. CUTGO is designed to further the Republicans’ well-established priorities: to cut spending on priorities like climate change and health care while passing huge tax cuts which balloon the debt and benefit the rich.

CUTGO would also make it more difficult to raise taxes on the wealthiest Americans or on corporations paying little or no taxes, by requiring a supermajority for the House to pass revenue increases. No one likes tax hikes, but with $31 trillion in national debt, they must be in the toolbox for reducing the deficit.

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Republicans defend CUTGO by saying that the rule makes it harder for Congress to increase spending. They are correct that limiting new spending — unless it’s offset — is a critical element in controlling deficits. But spending is only half the equation. Anyone who has ever balanced a family budget knows that slashing your income — or cutting revenues, in the case of government — is a recipe for bankruptcy.

The last time the House imposed CUTGO was under President Donald Trump, when Republicans passed a costly $2 trillion tax cut, every penny of which was added to our national debt. Thanks partly to those tax cuts, deficits increased by almost 50% between 2016 and 2019, long before COVID-19 hit our nation and required trillions in additional spending.

The Trump administration’s sorry record of bloating the debt is not new for the GOP. President Ronald Reagan passed huge tax cuts and defense spending increases, which expanded the deficit, and President George W. Bush swelled the deficit by adding trillions of dollars in red ink over a decade.

Congress actually followed PAYGO in the 1990s under President Bill Clinton — and it proved effective in controlling deficits. As the House Budget Committee staff director at that time, I recall the many instances when members of Congress and their staffs would come to us with creative ways to raise spending or cut taxes.

Our response was always the same: Interesting idea but first find a way to pay for it. And the results speak for themselves. PAYGO helped to shrink the deficit and bring us four years of surpluses from 1998 through 2001. Unfortunately, in 2001, Bush and the Republican Congress overrode PAYGO by passing two tax large cuts and an expensive drug program that helped convert four years of surpluses into more than $2 trillion in deficits over 10 years.

Deficits and debt are a serious and growing national problem. And the time for Congress to address it is long overdue. But trading PAYGO for CUTGO is a giant step in the wrong direction. So is letting the wealthiest cheat on their taxes.

The House should properly fund the IRS. And it should retain and strictly enforce its PAYGO rule — like it did in the 1990s. House Republicans talk a good game about lowering the debt. But that’s just hot air. Their votes to create more debt show that the House Republicans aren’t ready to govern.

Thomas Kahn served as Democratic staff director for the House Budget Committee from 1997 to 2016. He is a fellow at the Center for the Study of Congress and the Presidency at American University and a partner at the Cormac Group.