Well over a year after the arrival of the COVID-19 virus, the fiscal cost of fighting the economic effects of the pandemic and its associated lockdowns has been tremendous. For a country that already struggled with the concept of fiscal responsibility, even more extraordinary levels of deficit spending than usual have proven a hard habit for Congress to kick. Now, if there was any doubt left that Democrats are the party of fiscal irresponsibility, the dividing line between the party’s “progressives” and “moderates” exists not in whether or not to pass two bills totalling an additional $4.5 trillion, but in what order to pass them.
Prior to the onset of the pandemic, the deficit for FYs 2020 and 2021 was already projected to be $2 trillion. Just eighteen months later, that number has skyrocketed to over $6 trillion.
America was facing down an impending debt crisis even before the pandemic turbocharged deficit spending. Back in 2019, the Congressional Budget Office (CBO) was warning that debt held by the public was set to reach an unprecedented 144% of GDP by 2049, well above the level during World War II. This was primarily driven by increased spending on Social Security, Medicare and Medicaid, and paying interest on the debt.
Since then, the situation has only grown more dire. As of March, the CBO’s 30-year projection of the debt-to-GDP ratio has shot up to 202%. For context, Greece had a 127% debt-to-GDP ratio the year before it received its first emergency International Monetary Fund bailout.
In that context, one would hope that the priority for lawmakers would be reining in spending, or at the very least ensuring that any new spending is paid for by cutting existing spending. But that’s hardly the conflict that Democrats are engaged in.
Rather, “moderate” Democrats want to pass the $1 trillion infrastructure bill with $550 billion in new spending first, then the $3.5 trillion budget second. More progressive Democrats want to pass them both at the same time. Absent from these two supposedly polarized positions is a faction pushing to pass neither, or even just the “more affordable” $1 trillion bill.
And while advocates of both bills have presented them as “paid-for,” that’s only due to creative accounting. Authors of the infrastructure bill scrambled to create offsets for the legislation, most of which fall apart upon closer inspection. And to the extent that the $3.5 trillion package is “paid-for,” it is funded on the backs of American taxpayers.
Yet even this decidedly immoderate form of “moderation” has proved too much for Speaker Nancy Pelosi, who took the unusual step of attempting to “deem” the $3.5 trillion budget adopted as part of a rule vote. It’s telling that Democrats feel the need to reach into their bag of procedural tricks to overcome even the weakest form of moderate opposition.
Taxpayers can only hope that this squabble between two left-wing positions manages to produce the only true “moderate” result of avoiding saddling future generations with yet more debt and taxes. After all, with moderates like these, who needs extremists?
Andrew Wilford is a policy analyst at the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.