The Era Of Trillion Dollar Deficits Is Set To Return, And Republicans Don’t Seem To Care

With Republicans fully in control in Washington, their concerns about the budget deficit seem to have disappeared.

In both the closing years of the George W. Bush Administration and the early years of the Obama Administration, the Federal Government saw several years where the annual budget deficit exceeded $1 trillion dollars per year, a phenomenon that both placed serious restraints on the ability to either party to increase spending on pet projects and led to significant increases in the national debt to the point that it increased some $6 trillion during Obama’s first term. In part, of course, these numbers were due to the impact of the Great Recession and the fact that the much weaker economy it left behind resulted in serious reductions in tax revenues for an extended period of time. It was in part because of the size of these deficits, of course, that Republicans were able to have success in the 2010 midterms to the point where they gained some 65 seats in the House of Representatives and regained control of that body after losing control just four years before. In the years after that, the various fiscal showdowns between Republicans and the Administration led to measures such as the budget sequestration deal that had a real impact on holding down at least some of the discretionary spending in the Federal Budget. That deal, contained in the Budget Control Act of 2011, are technically still in effect, but can easily be disposed of by Congress if they chose to do so. In any case, those cuts and the caps on spending that followed, combined with the fact that the recovery that began in 2009 which led to increases in tax revenue, helped to reduce the annual budget deficit significantly over the remaining years of the Obama Presidency, although it obviously didn’t eliminate it entirely.

Now, with Republicans in full control of both the Executive and Legislative Branches of the Federal Government, it looks like we’re set for a return of those trillion dollar budget deficits:

WASHINGTON (AP) — The era of trillion-dollar budget deficits is about to make a comeback — and a brewing budget deal could mean their return comes just next year.

Talks on a budget-busting spending pact that would give whopping increases to both the Pentagon and domestic programs have been inching closer to an agreement, aides and lawmakers said.

GOP defense hawks are prevailing over the party’s depleted ranks of deficit hawks while Democrats leverage their influence to increase spending for domestic priorities such as combating opioid misuse.

Details are closely held and subject to change. But at issue is a two-year deal to increase crunching caps on spending set by a failed 2011 budget deal. Republicans have pushed for defense increases in the neighborhood of $80 billion a year and have offered Democrats nearly as much — $60 billion or so per year — for nondefense programs.

Add in $80 billion to $90 billion worth of hurricane aid for Texas, Florida and Puerto Rico, health care funding and money for President Donald Trump’s border security plan, and the final tally could total close to $400 billion. The potential cost, over the 2018-19 budget years, would rival the deficit impact of last year’s tax measure over that period.

“Republicans for years have made all of these bold promises to rein in spending,” said Brian Riedl, a budget analyst at the conservative Manhattan Institute. “And they’re doing the opposite.”

The negotiations are bipartisan since it takes votes from Democrats to lift the budget caps and advance a follow-up omnibus spending bill, whose overall cost is likely to exceed $1.2 trillion. That means domestic programs get their due, despite the opposition of conservatives.

“Right now, everything I’m hearing grows the size of government at 13 percent,” said Rep. Mark Meadows, R-N.C., citing back-and-forth budget offers. “And that’s a nonstarter for conservatives.”

Still, Republican deficit hawks stepped aside during last year’s tax debate, and it’s not looking like they’ll mount a stand now. Instead, GOP defense hawks worried about lagging readiness, training and weapons procurement are carrying the day, even if it means placating Democrats with spending elsewhere.

“This budget dysfunction has a human cost, and our military is bearing the brunt of it,” said Mac Thornberry, chairman of the House Armed Services Committee, citing a spate of casualties from training accidents last year.

The potential agreement would significantly exceed Trump’s request for a $54 billion increase in defense spending — to $603 billion before adding war funds — above the current cap. Thornberry, R-Texas, said negotiators are “very close to a budget agreement.”

The budget talks are closely held and occurring as lawmakers struggle to sort through a solution to protect younger immigrants soon to be at risk of deportation with Trump’s elimination of the Deferred Action for Childhood Arrivals program, called DACA, established by President Barack Obama. House Minority Leader Nancy Pelosi, D-Calif., has linked progress on the budget with action to address DACA, but other Democrats are beginning to agitate for delinking the two, lest the opportunity for a budget pact be lost.

A trade of offers on Thursday represented progress, aides said, but an agreement didn’t appear imminent. The aides, both Democrats and Republicans, spoke on condition of anonymity because the talks are secretive.

In addition to the efforts by defense hawks to increase defense spending by an amount higher than even what the Trump Administration is asking for and things such as disaster relief for the areas impacted by last year’s trifecta of Hurricanes in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands, there are a number of other factors that seem destined to lead to increased budget deficits in the years to come. In the near future, for example, the White House is set to unveil the details of its proposal for infrastructure spending, a bill that is expected to add up to at least a trillion dollars. Given the fact that this would be the kind of bill that would have an impact on essentially every state and the vast majority of Congressional Districts, it’s likely to receive enthusiastic support from bipartisan majorities in both the House and the Senate, and its likely that members on both sides of the aisle in both bodies will seek to add projects to the bill that will increase the final price tag substantially. There will be similar motivations for members to largely support the effort of defense hawks in the House and Senate to increase the Pentagon’s budget by number even higher than what the President is asking for, and to put defense spending on a course where spending in that area is likely to increase substantially over the next several years at least even though the need for such increases isn’t entirely clear. Finally, of course, there is the tax bill passed by Congress and signed into law by the President in December which the Congressional Budget Office and other analysts have estimated will add somewhere close to $1.5 trillion to budget deficits over ten years even under the most optimistic of assumptions about the direction of the economy. Of course, the impact of all of this could be magnified in the event of some crisis that has an impact on the economy, or in the event that we hit even a brief recession in the next several years.

All of this is happening, of course, at a time when the Republican Party has full control of the Executive and Legislative Branches of government, and much of the pressure that seems destined to drive deficits up is coming from Republicans and the policies they are advocating and passing into law. If this were occurring during a time when Democrats were in control of Washington, or even where there was a Democrat in the White House, the GOP would no doubt be using much the same rhetoric it did during the early years of the Obama Administration. Now that they actually have control of Congress, it seems clear that this Obama-era rhetoric was merely partisan rhetoric and a tool that the party could use as a cudgel against the Administration in general and against President Obama specifically. Additionally, conservative pundit and outlets such as Fox News Channel would be waging war against what they’d no doubt call the fiscal irresponsibility of Democrats who would be doing exactly the same things they’re doing now. With power in Washington now fully in Republican control, it seems clear that, except for a small cadre of deficit hawks in the House and Senate, most Republicans are willing to look the other way while the Federal Government continues to spend far more than it can afford to at a time when the risk of a future recession is far more likely than it was in the early years of the Obama Administration. The hypocrisy is both apparent and entirely unsurprising.



FILED UNDER: Congress, Deficit and Debt, US Politics, , , , , , , , , , , , , , , , , , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. gVOR08 says:

    Republicans don’t care about deficits. Hoocudanode.

  2. Sleeping Dog says:

    Trillion dollar deficits under Prez Pud? Fake news, he told us that the tax cuts will pay for themselves and all sorts of pixie dust would sweep the deficit away.

    You’re saying it ain’t true?

  3. teve tory says:

    If you ask the questions “will this help rich people get richer” and “will this hurt poor people” you can figure out 95% of GOP policies.

    That’s literally all they give a shit about.

  4. Sleeping Dog says:

    @gVOR08: They only care about deficits when a Dem is in the WH

  5. Kylopod says:

    It was in part because of the size of these deficits, of course, that Republicans were able to have success in the 2010 midterms

    It’s very debatable that the deficit issue had any real impact on the GOP’s electoral success. They did use it as a talking point against the Dems, but it wasn’t even necessarily their central point. After all, among their strongest attacks on the Affordable Care Act concerned its cuts to Medicare and its tax increases–both deficit reduction measures.

    Moreover, there’s no particular evidence that the American public cares much about large deficits when the economy is doing well. That was the case during the Reagan years, and it was the case during the W. years before the economy collapsed.

    The political scientist Jonathan Bernstein has speculated that most Americans could not correctly define what the budget deficit is, and that when they complain about it it’s more often just a stand-in for general complaints about the economy. I definitely saw an element of that in a 2010 interview with Tea Party Nation founder Judson Phillips, who seemed seriously confused about the difference between government revenue and economic growth.

    The point is often made that Republicans only care about deficits when they’re out of power, but I’d put it a little differently: from the Reagan era to the present day, the GOP economic program has been fundamentally a set of policies that by all objective measures lead to large deficits but where they claim against all available evidence that the opposite will occur. That’s been true regardless of whether they’ve held power or not. Remember, one of the Tea Party’s slogans was “taxed enough already.” And even now, they’re still claiming the tax bill will reduce the deficit, by stimulating economic growth to such a degree (far beyond even the most ambitious estimates of any professional economist, in fact) that the tax cuts will pay for themselves.

    In short, the main problem isn’t partisan hypocrisy, it’s that the GOP’s entire economic agenda is a scam.

  6. Slugger says:

    Republican Presidents have always run deficits, always. The only President who presented a balanced budget during the lifetime of anyone reading this is Clinton.
    Republicans are strong on personal sexual morality. With a few exceptions.
    Roe v Wade has been around for almost 50 years, and the GOP has not managed to change it.
    I am beginning to smell a pattern here. I am beginning to doubt that there will be a wall on the Mexican border.

  7. Kylopod says:


    Republican Presidents have always run deficits, always. The only President who presented a balanced budget during the lifetime of anyone reading this is Clinton.

    Well, sort of. Eisenhower balanced the budget, as did LBJ. (Those are both before my time, but I suspect at least some of the people here were alive during at least one of those presidencies.) The modern dichotomy where Republican presidents have run large deficits started with Reagan, who not incidentally was when the party adopted the “supply-side” hoax and centered the party squarely on tax cuts.

  8. Tyrell says:

    Well, someone sure needs to care about it. And I am not some “sky is falling” doom and gloom person.
    See Bill Bonner – “Empire of Debt”, Peter Schiff – “Real Crash”.
    “It is not if; it is when”

  9. Just 'nutha ig'nint cracker says:

    @Kylopod: Well that’s a pretty cynical way of looking at it. Good job!

  10. Kylopod says:

    @Just ‘nutha ig’nint cracker:

    Well that’s a pretty cynical way of looking at it. Good job!

    Hmmmm. I take that as a compliment…I think.

  11. teve tory says:

    I read an article today about how the Republicans are screwing up Oklahoma. Holy cow.

    Also by the way, the way the Dow futures look, it’s going to open up another thousand points down tomorrow morning.

  12. JohnMcC says:

    @Slugger: Ahem, my good sir! I am old but of sound enough mind to remember Lyndon Baines Johnson quite well. He had the quaint notion that a government willing to fight a war should pay for same and proposed a ’68-69 budget that included a ‘surtax’ on higher paid persons.

  13. Pete S says:

    The Era Of Trillion Dollar Deficits Is Set To Return, And Republicans Don’t Seem To Care

    They haven’t cared for 35 years, why would they care now?

  14. becca says:

    Scariest words in the English language?

    ” I’m a Republican and I’m here to help.”

  15. Mister Bluster says:

    @JohnMcC:..He had the quaint notion that a government willing to fight a war should pay for same and proposed a ’68-69 budget that included a ‘surtax’ on higher paid persons.

    Less affluent citizens paid the price of having their boys come home in coffins.
    Unlike the fortunate son of Fred and Mary Anne Trump.

  16. Hal_10000 says:

    It took George W. Bush, a notoriously fiscally irresponsible President, two wars a giant recession and eight years to get to trillion dollar deficits. It’s take Donnie Boy one. If we hit a recession or something, we will be in serious trouble.