America didn’t become a great country by making easy decisions. Our greatness comes through making tough political choices that lay the foundation for growth, not by mortgaging our future with borrowed money.
Yet that is precisely what the tax reform plan currently working its way through Congress would do. When we served in the White House and Senate, respectively, we frequently heard principled conservatives warn of the dangers of ever-growing deficits. And for the good of the country, we found common cause with many of them. The same voices that demanded fiscal responsibility back then must speak out now against a tax plan that would add more than trillion dollars to the national debt.
During President Obama’s two terms in office, Republicans were quick to warn that borrowing more money put our long-term fiscal health at risk. “We have a debt crisis staring us in the face,” warned Paul Ryan in 2011, when he was chairman of the House Budget Committee. “I’m convinced our nation’s biggest threat is debt and deficits,” declared Congressman Kevin Brady, responsible for shaping the GOP’s tax reform plan today. President Trump, too, campaigned as a deficit hawk, going so far as to promise to erase the national debt entirely within eight years.
While we are both Democrats, we share the broad concern President Trump and his Congressional allies have so often expressed: left unchecked, an ever-growing national debt poses a real threat to American prosperity. We haven’t just paid lip service to fiscal responsibility ― we were proudly committed to it during our time in public service. In 1990, Democrats compromised with President George H.W. Bush to combine modest spending cuts with small increases in revenue. In 1993, we made further progress, and in 1997 we worked with a Republican Congress to finally balance our budget. The actions became the foundation for years of strong economic growth.
In each of these cases, the politically easy thing to do would have been to fund presidential priorities with borrowed money. But we took conservative concerns seriously. We chose responsibility over expediency. And America was better off as a result.
We should follow this same approach with tax reform. Yet just last week, House Republicans chose the opposite path. Their budget commits us to borrowing up to $1.5 trillion for new tax cuts, much of it for wealthy individuals. While we understand the temptation of cutting taxes without paying for it, we believe President Trump and leaders in Congress ought to heed their own repeated warnings. Instead of a deficit-financed tax reform plan, they should adopt a responsible approach that fixes problems in our tax code, helps grow our economy and reduces our debt over the long term.
So what would a fiscally responsible tax plan look like in 2017? First, it would not rely on the assumption that huge tax cuts lead inevitably to growth, or that raising even modest amounts of revenue lead to decline. We now have decades of evidence to dispute both of these notions, while there is almost no evidence to support them.
Second, responsible tax reform would focus on boosting the national economy, not just household consumption. As it stands now, the government would borrow large amounts of money to secure a benefit for a small number of people who, not coincidentally, are likely to write campaign checks as a consequence. It’s hard to see how this qualifies as bang for the average taxpayers’ buck. Instead, let’s encourage hiring by reducing the overall corporate tax rate while closing unfair loopholes. If we are going to borrow money, let’s do so to pay for infrastructure, early childhood education, public works programs, and other projects that have been proven to provide a strong return on investment.
...huge, debt-financed tax cuts for wealthy individuals will not be a win for America, especially over the long term."
Third, just as in past budget negotiations, our fellow Democrats should be open to sensible, targeted spending cuts. We strongly believe that government can be a force for good in people’s lives. Smart policy can grow the economy for everybody and protect the most vulnerable among us. But our government cannot play its important role if it runs out of money. We can either curb spending in a careful way now, or be forced to cut back on truly vital programs or services in the future. We believe the first option is the right one.
We’ve both spent time in the political arena. We understand the incentives to take the easy way out, to take credit for benefits today and defer the payments until tomorrow. We also understand that, after a rocky first 10 months, the administration and its allies in Congress are eager for a big legislative win. But huge, debt-financed tax cuts for wealthy individuals will not be a win for America, especially over the long term.
It’s time for leaders in Congress ― and a president who ran promising to bring down the national debt ― to practice what they have preached. We can encourage growth. We can lower corporate tax rates. We can make our tax code simpler and fairer. But we cannot make America great again by borrowing large sums of money to provide tax cuts to the wealthy. And it would be reckless to try.