Within days after the debt ceiling deal was struck, Republicans appeared to renege by indicating they will seek deeper spending cuts in budget negotiations; and now, on top of that, they’re also “pushing deep tax cuts for companies and the affluent,” ABC News reported on Monday, June 19, 2023 (read story here).
These tax cuts won’t add to deficits, though, if Republicans can offset them by “by wiping out $216 billion in tax breaks over 10 years that Biden signed into law last year to support the development of electric vehicles and renewable energy.”
Rep. Jason Smith (R-MO), who chairs the House Ways and Means Committee, claimed, “We are undoing bad policy and replacing it with good.” That’s a matter of opinion. Republicans are climate deniers and fossil fuel boosters, and invariably steer tax relief to the rich and businesses. That is, to their donors.
The White House reacted by calling them hypocrites and accusing them of not being “sincere about shrinking deficits.” That’s not totally true; Republicans sincerely want to reduce deficits by cutting spending favored by Democrats; but if push comes to shove, they’ll usually put a higher priority on defense spending and tax cuts for the rich than reducing borrowing.
What it boils down to is Republicans and Democrats want different things, and both are willing to run deficits to get what they want. Trump added trillions to the national debt during his four years in office. Their philosophical differences amount to this: Democrats help others, and Republicans help themselves.
The Tax Policy Center (profiled here) called the Republicans’ math “cynical.” They explain, “They’re taking ten years of revenue and using it to pay for two years of tax cuts. They make the tax cuts temporary so it looks like it costs less,” pointing out that if the tax cuts lasted for the entire 10 years, they would wipe out all the spending savings in the debt ceiling deal.
ABC News says,
“While the House bill is unlikely to pass the Senate or get signed by Biden, it’s part of a broader message on how each party thinks about the tax code. Just as Democrats are deeply skeptical that the GOP’s [tax] cuts would produce [economic] growth, Republicans are wary about administering social policy through the IRS. Those differences point toward the risks in 2025, when the debt limit drama restarts and tax breaks for the middle class and wealthy alike are on the verge of lapsing.”
How this plays out will be decided by the voters in 2024. If they give the White House and Senate to Republicans, the GOP will get what it wants. If they give Biden a second term, keep the Senate Democratic, and return the House to the Democrats, then the Democrats will get what they want. If we end up with divided government, like we have now, we’ll get another humongous fight and little or nothing will get done.