Sunday, February 11, 2018

Rise of the Big Government Republicans

The Republican Party seems to have turned a corner in recent months. After a promising start to the Trump Administration that included regulatory reform and concluded with a long-awaited tax reform bill, the party seems to have taken an abrupt turn away from fiscal conservatism toward big government and big spending policies.

The most obvious sign of the shift is the new budget signed by President Trump this week. The new budget raises spending caps by $300 billion. The first Trump budget raises spending by about $500 billion over the 2017 budget signed by Barack Obama.

The new budget also includes increases to the debt ceiling through March 2019. Previously, Republicans tied spending cuts to increases in the debt ceiling, but no more. The new budget increases military spending by $165 billion and nonmilitary programs by $131 billion. The funds include $10 billion for infrastructure, $2.9 billion for childcare and $3 billion to fight opioid abuse.

Predictably, the massive spending increases will dramatically increase the deficit. Even before the deal became law, the Washington Post reported that borrowing for the 2018 fiscal year was expected to reach its highest level in the past six years, a date that coincides with the Republican takeover of Congress in the 2010 Tea Party wave.

The national debt has already reached crisis levels, as Vice President Mike Pence realized during the campaign. President Obama nearly doubled the debt in eight years, bringing it to more than 100 percent of GDP. The continued increases in deficit are bringing the US Treasury into Greek territory.

There are indications that more increases in spending are to come. President Trump has proposed a $1.5 trillion infrastructure spending plan. Perhaps coincidentally, the price tag for Trump’s plan is almost exactly double that of President Obama’s infrastructure stimulus bill from 2009. All that is lacking are promises jobs from shovel-ready projects.

Similarly, Republicans seem ready to embrace a new family leave entitlement that is championed by both Donald and Ivanka Trump. The plan includes paid time off for six weeks for new parents courtesy of the federal government.

Other Republican big government priorities are not new. Trade protectionism was growing in the party even before Donald Trump vaulted to its head. Under President Trump, free trade has taken a beating as tariffs have been imposed and trade deals renegotiated. One of Trump’s first acts was to withdraw the US from the TPP free trade agreement. In the end, trade restrictions hurt American businesses and consumers by increasing the cost of goods.

Immigration policy has long been a big government aspect of the Republican platform as well. Most Republicans support border security, but immigration hardliners favor a crackdown to deport illegal immigrants that would require an expanded federal police bureaucracy.

Deportation of illegal immigrant workers would be expensive and counterproductive. CNN reported in 2016 that it cost more than $10,000 to deport each illegal immigrant. At the same time, deportations can result in labor shortages than increase costs for employers and ultimately for consumers as well.

Perhaps it isn’t surprising that Republicans would jettison their promises of fiscal restraint. After all, the same pattern has been followed several times in the past few decades. What is surprising is the extent and the speed with which they have done so.

Originally published on The Resurgent

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