WASHINGTON – United States President Joe Biden’s US$1.9 trillion (RM7.7 trillion) plan to revive the US economy has been met with howls from the Republican opposition, with conservative lawmakers saying it is full of money-wasting programmes at a time when the country does not need any more debt.
Yet, it was not so long ago that the party, led by Donald Trump in the White House, passed massive tax cuts and an even larger stimulus package to fight the economic disruptions caused by Covid-19 – expensive measures that fuelled the rising budget deficit.
Now, with Democrats back in the presidency and narrowly controlling Congress, Republicans are citing concerns about rising US debt and deficit as grounds to object to Biden’s agenda.
The US$1.9 trillion package that the president proposed to accelerate the country’s recovery from the coronavirus pandemic is “a colossal waste, and economically harmful”, said Republican Senator Pat Toomey.
“The total figure is pretty shocking,” said Mitt Romney, a fellow Republican senator who seized on the rising national debt during his failed attempt to unseat Democratic president Barack Obama in the 2012 election.
Time to ‘act big’
New Treasury Secretary Janet Yellen has taken the lead in countering Republicans’ protests, saying at her recent confirmation hearing: “Neither (Biden) nor I propose this relief package without an appreciation for the country’s debt burden.
“But right now, with interest rates at historic lows, the smartest thing we can do is act big.”
Biden served as vice-president under Obama, in a period when Republicans repeatedly raised debt and deficit concerns to stymie his agenda.
Trump, then a private citizen, joined in, tweeting in 2012: “The deficits under (Obama) are the highest in America’s history. Why is he bankrupting our country?”
Yet, after Trump took office in 2017 with a Republican-controlled Congress, that party’s lawmakers seemed to forget those concerns.
Government spending increased, and Congress enacted a US$2 trillion tax cut – the most significant tax reform in 30 years, and one voted for by every Republican senator, including the “budget hawks” known for decrying such spending.
“Republican concerns about the deficit, they are kind of tough to take seriously right now, given their support for tax cuts and spending increases during the Trump years,” said Tori Gorman, policy director at the non-partisan Concord Coalition, which advocates for fiscal responsibility.
“And a lot of that took place even before the pandemic,” she told AFP.
The tax reform boosted growth in 2018, but also increased the budget deficit and inflated debt, which rose from US$19.5 trillion four years earlier to nearly US$27 trillion at the end of September 2020.
‘Hypocrisy’ on both sides
At the beginning of 2020, before the pandemic battered the economy, Trump signalled that debt was no longer a concern, saying money was better spent on the country’s armed forces.
He also pushed back the target date for achieving a balanced federal budget to 2035 from 2030, even as the Congressional Budget Office warned of a spiralling deficit.
Then, Covid-19 broke out, and Democrats and Republicans agreed to pass the US$2.2 trillion Cares Act, the country’s largest-ever stimulus package. It helped keep the economy from an even worse downturn.
But in the months to follow, Republicans who controlled the Senate objected to Democrats’ attempt to pass an even larger follow-up measure, arguing for smaller individual bills before the parties, at the last minute, signed off on a US$900 billion law last month.
With Democrats now fully in control of the levers of power in Washington, said Gorman, both sides have lost credibility over the deficit.
“I think both sides are guilty of hypocrisy when it comes to fiscal responsibility.” – AFP, January 31, 2021
