Earlier this week, the Trump administration released a federal budget that contradicted itself. This wasn’t terribly surprising. After all, the president spent his entire campaign vowing to realize a long list of mutually exclusive policy goals: large increases in funding for the military and border defense; the maintenance of Medicare and Social Security at their current benefit levels; a $1 trillion infrastructure package; enormous tax cuts for both the wealthy and middle class; and a balanced budget within ten years.
The most gifted fiscal-policy thinkers in the world would struggle to produce a document that complied with such commitments. And the Trump White House does not boast a world-class team of economic advisers — or, really, any “team” of economic advisers, at all.
And so, on Tuesday, Mick Mulvaney unveiled a budget that:
1) Included cuts to federal agencies and anti-poverty programs so draconian, multiple Republicans declared them dead on arrival.
2) Pretended that Trump’s infrastructure pledge did not exist, Social Security disability benefits aren’t really Social Security, and the estate tax will still provide the government revenue even after it’s abolished.
3) Baselessly assumed that Trump’s enormous tax cut will pay for itself, by generating $2 trillion in new revenue through higher economic growth.
And all that still wasn’t enough to get the dang thing to balance one decade from now, without also arbitrarily counting that $2 trillion a second time.
So the administration arbitrarily counted that $2 trillion a second time.
It seems doubtful that the administration deliberately chose to portray itself as incapable of performing basic arithmetic. The error was likely driven less by dishonesty than a combination of carelessness and necessity.
But, once its error was exposed, Mulvaney decided to err on the side of mendacity.
Asked about his budget’s Dada approach to mathematics at a Senate hearing Thursday, Mulvaney explained that there had been no error: His budget assumed that Trump’s tax plan will pay for itself purely through the abolition of loopholes. Thus, the greater revenues it would generate through faster growth could be allocated to defraying the cost of Trump’s spending plans.
It would be about as reasonable for Mulvaney to assume that the Mexican government will pay for the president’s border wall, the F-35 program, and Medicare Part D.
There has been a lively debate among Republicans about whether their tax plan should increase the deficit or pay for itself. The president’s tax blueprint and recent public statements suggest the White House is fully behind option No. 1. But even those pushing for “revenue-neutral” tax reform assume that magic, growth-induced revenues would be part of the “pay for.” No elected Republican has proposed a reform package that raises taxes as much as it cuts them. Given the party’s commitment to massive tax cuts for the rich, such a plan would involve a politically toxic tax hike on middle-income households.
So, by itself, Mulvaney’s absurd excuse would be about as embarrassing as the math error it was formulated to deny. And its absurdity was only exacerbated by this Wall Street Journal story:
White House budget director Mick Mulvaney told a Senate committee that the administration’s tax plan doesn’t bank on any revenue stemming from faster economic growth. Four floors below that hearing, Treasury Secretary Steven Mnuchin gave a contradictory answer to a different Senate panel, insisting that the administration’s tax plan will partly pay for itself with economic growth.
Senior Trump administration officials split with each other publicly Thursday on a core feature of the president’s tax plan.
Is it really better to portray yourself as ignorant of the basic contours of your party’s tax debate — and your administration as internally divided over the basic principles of its tax policy — then to admit you made an adding error?
At any rate, Mulvaney’s budgetary debacle is a vivid illustration of his own incompetence, and that of the Trump White House more broadly. But it’s worth noting that the incoherence of the administration’s budget is rooted in the incoherence of the fiscal agenda of the entire Republican party: It makes little sense to drastically cut taxes on the rich, when your nation has a public pension system and an aging population. It makes even less sense if you also want to increase defense spending; and less sense, still, if you have proven politically incapable of making that public pension more austere, or of passing truly radical cuts to the government’s discretionary budget.
But the Republican coalition depends on the money of defense contractors and libertarian billionaires — and the votes of the elderly. And they all want what they’ve been promised.
The Trump administration didn’t create the GOP’s budget problem. It’s grotesque incompetence has simply made that problem harder to conceal.