This doesn’t add up
In targeting the U.S. Agency for International Development (USAID) for demolition, Trump and his Republican sycophants in Congress claim they want to cut spending to address the deficit. However, it’s all theater. Along with their call to end USAID’s $40 billion annual budget, the GOP is eagerly preparing fresh tax cuts that may cost over $11 trillion over the next decade. Given the failure of the last Trump tax cuts at generate revenue, there is no reason to believe his new ones will.
Indeed, the 2017 Tax Cuts and Jobs Act led to “record-low, not high, revenues outside of a recession,” according to an analysis last summer from the Center for American Progress. Claims that these tax cuts would pay for themselves proved false, as federal revenues fell well below the projections.
Now, in the face of new tax cuts, the argument that economic growth will manage to offset lost revenue appears to be folly. The Committee for a Responsible Federal Budget calls this reasoning “fantasy math.” A new report points out that independent analyses suggest that the tax cuts could reduce federal revenue by anywhere from $5 trillion to $11.2 trillion over the next decade.
The GOP is not exactly denying it. “Republicans readily admit the revenue loss from their tax proposals will be far larger than the spending cuts they’re envisioning,” according to reporting from HuffPost. In other words, slashing USAID does not exactly balance the budget but is a deceptive, symbolic move that would make Republicans look serious about cutting spending as they push a destructive policy agenda. Cutting USAID would destabilize vulnerable regions, worsening human trafficking, disease outbreaks, and famine. The new Trump tax cuts would benefit the wealthiest Americans, with the rest of America and the world footing the bill.
Just as the 2017 tax cuts did not generate the promised revenue, there is no reason to believe that Trump’s new desired tax cuts will. We’ve seen this tired plot line before, and it’s no less distressing now. After steroidal political posturing, GOP “leadership” will once again bring the country to new heights of fiscal irresponsibility, leaving untold damage—economic and otherwise—in its wake. When you live in the real world and must tackle real problems, “fantasy math” is not helpful.
Ron Leshnower is a lawyer and the author of several books, including President Trump’s Month