Is It Even Worth Caring About Deficits?

 U.S. President George W. Bush speaks at Airlite Plastics in an effort to drum up support for his tax cut proposal May 12, 2003 in Omaha, Nebraska. The president was in town stumping to increase the tax cuts proposed in the Senate's $350 billion plan. Sen. Ben Nelson (D-NB) (L), the state delegation's sole Democrat, is seen as a crucial vote in getting the tax cut increased to the $550 billion, 10-year plan the president favors.
... if some Republican shmuck will just run the deficit back up again? Photo: Eric Francis/Getty Image

Rather than join the rest of the liberal world in flaying me for the specifics of my argument that President Obama should consider giving Republicans a Medicare eligibility age increase, Matthew Yglesias poses a more basic question: Why should Obama strike any deal at all on the long-term deficit?

Yglesias is not saying the budget deficit shouldn’t be cut, and he’s not arguing that it’s impossible to get a fair tax-hikes-for-spending-cuts trade from the GOP. Instead, he’s making a political point that I’ve considered on and off for the last decade. The argument, in a nutshell, is that Republicans don’t actually care about deficits. They will invoke deficits during Democratic administrations as a way of limiting social spending, but they will fiercely oppose Democratic initiatives that reduce deficits (like Bill Clinton’s 1993 deficit plan or the Affordable Care Act). And then when they control the government, they will pass huge, deficit-financed tax cuts of their own.

If you accept that premise, then it’s pretty pointless for a Democrat to trade off spending for revenue. All you’re doing is finishing the “starve the beast” project that Republicans can’t do on their own.

This certainly has proven true in recent years. Over the last few years of the Clinton administration, liberals debated whether it made sense to use the budding surplus to pay down the national debt or to enact new spending initiatives (or, more accurately, enact a mix of new spending initiatives and new tax cuts, the latter of which was needed to obtain GOP votes.) I wrote a long piece arguing for the former. I still think the economics of the argument got it right. But the politics turned out to be a total disaster. Preserving the budget surplus just gave the Republicans more room to enact huge tax cuts when they took power in 2001.

There’s a strong case that this still holds true now. Republicans complain constantly about the deficit, just as they did under Clinton, but there’s no reason to think they mean it as anything other than a proxy for fears about runaway big government, just as they did then.

On the other hand, Yglesias is calling this a “law” when it’s really more of a pattern. The pattern depends not only on Republicans continuing their recent form, which is likely, but also on them regaining full control of government fairly soon, which may or may not happen. (The Bush tax cuts required the shameful cooperation of a handful of Senate Democrats, who have grown more partisan in the intervening years in part because their cooperation with Bush failed so utterly.) And in the meantime, a deal to reduce the deficit over the next decade does help clear the decks for the rest of Obama’s term in an immeasurable but probably real way.

So I still find the “do something about the deficit” argument more compelling. But the objection that a deficit deal may just clear the way for the Rubio tax cuts is haunting enough to take seriously.