There is not a budget hawk in America who could say they were not surprised to see Office of Management and Budget (OMB) Director and Acting-Chief of Staff Mick Mulvaney say late last month that the $22 trillion national debt “doesn’t seem to be holding us back from an economic standpoint.” Days after one-time deficit hawk Mulvaney downplayed the debt in his discussion of the economy, a video featuring National Economic Council Director Larry Kudlow’s ebullient praise of the economy was released by the White House.
Neither Mulvaney nor Kudlow mentioned the national debt, which the Congressional Budget Office (CBO) noted is “at its highest level since shortly after World War II” in a report last year.
The Mick Mulvaney of 2011, 2013, or 2016 would be just as surprised as the remaining budget hawks of today. He was touted as a fiscal hawk who would rein in government spending during his nomination, and a 2017 POLITICO profile of Mulvaney went as far as labeling him “Mick the Knife” for his strident approach to debt and government spending. It would have been inconceivable that Mick the Knife — the then-freshman congressman who blasted a $1.6 trillion Obama administration budget proposal as “a joke” and “absurd” — would later be the one announcing President Trump’s intention to sign a $1.3 trillion spending bill.
Mulvaney is not the only one finding himself in the uncomfortable position of explaining his reversal. In 2013, Larry Kudlow penned an op-ed advising Republicans to adopt an “absolute rock-solid commitment to spending cuts” or risk losing their House majority in the 2014 midterms. When asked in February about the national debt hitting $22 trillion, he brushed the issue aside by stating the debt “is and will continue to come down as a burden on the economy.”
The debt has not gone down, and a just-released CBO report of President Trump’s 2020 budget found that the plan would produce deficits averaging at 3.8 percent of GDP from 2020 to 2029. The transformation of two public figures noted for their commitment to addressing the growth of government spending during the Obama administration into apologists for the Trump administration’s reckless fiscal policies raises the question of what happened to overtures for fiscal responsibility in such a short period of time.
As ever, political expediency is at the root of the problem. While erstwhile budget hawks were happy to make hay out of irresponsible fiscal policies and demand reform during the Obama administration, the tribal temptation of holding a president of the same party to such a standard has taken precedent. Lamenting the disappearance of the Obama-era vigor for curbing spending, CNN reporter Michael Warren laid bare the fact that “talk of cutting the deficit is cheap. Following through, on the other hand, commands a price Washington still isn’t willing to pay.” Political considerations continue to receive priority with no attempt at reform in sight.
The ambivalence with which Washington treats the debt is also at the peril of both current economic growth and future generations. As financial analyst James Grant bluntly puts it, “it is no opinion, but an arithmetic truism, that our debts are growing faster than our means to discharge them.” Eventually, Congress will have much more difficult choices to make regarding the unsustainable trajectory of government spending. If events are allowed to unfold that far, the next election will be the least of their concerns.
Wistful hopes that future generations will clean up the unsustainable spending practices of the present only justify current inaction. Pursuit’s Bryan Berky reminds that the current “debt binge means younger Americans who still have their peak earning years ahead of them will see more of their tax dollars being directed towards covering the costs of unrestrained spending and promises of prior generations rather than investments in themselves.”
Though the financial burden of today’s inaction cannot be felt in the moment, the growing weight of that burden continues to mount on the future. When it arrives, the costs of today’s refusals to act will be very real.
