Impossible fiscal promises made by presidential candidates
Even in its early stages, the 2016 presidential race looks like it will be remembered for two depressing superlatives. The candidates will spend more money than ever before, and they will promise more costly聽give-aways than any politicians in history.
We鈥檒l save the campaign finance story for another day. Instead, let鈥檚 focus on the promises. With the election still more than a year away, we are already drowning in what GOP candidates are calling 鈥渇ree stuff.鈥� They mean it as a criticism of Democrats but聽it applies to them as well.
Republican hopefuls are in a surreal competition over who will cut taxes more. Seemingly, it takes a tax cut of a trillion dollars just to buy a seat at the table. And the really high rollers are tossing double-digit trillions into the pot. Yuge tax cuts, one might say.
The numbers are eye-popping. The six GOP candidates whose plans have been聽聽have proposed an average of $6.5 trillion in tax cuts over the next decade.聽 Here is the foundation鈥檚 list and the size of the proposed tax cuts (before considering effects on聽economic growth): Rand Paul: nearly $3 trillion; Rick Santorum: $3.2 trillion; Jeb Bush: $3.7 trillion; Marco Rubio: $6.1 trillion; Bobby Jindal $11.3 trillion; Donald Trump: almost $12 trillion. Even using the Tax Foundation鈥檚 aggressive method for calculating the economic effects of these plans, only one GOP tax cut comes in under $1 trillion (Paul squeaks in聽at聽a mere $956 billion).
These promises are almost always accompanied by pledges to balance the budget. How will the candidates make the math work? They don鈥檛 ever say. While pols gleefully describe their tax cuts in great detail, most go silent when it comes to exactly how they鈥檇 pay for it all. Rarely do they get beyond gauzy promises to cut waste or close tax 鈥渓oopholes鈥�.
For context, to pay for Trump鈥檚 tax cuts without adding to the $18 trillion national debt, Congress would need to slash聽planned spending by one-quarter over the next decade. For example, Trump could avoid adding even more to the聽debt by聽eliminating all spending for national defense plus all domestic spending except for entitlement programs such as Medicare and Social Security. Note: This wouldn鈥檛 reduce the current debt by a dime. It would just pay for his聽proposed tax cuts.
On the Democratic side, Senator Bernie Sanders (I-VT) is promising enormous new spending programs, including free college education for all and universal health insurance. While he has expressed no interest in聽balancing the budget, a President Sanders would have to聽pay for at least some of his new initiatives.
So far, all he鈥檚 proposed are tax hikes on 鈥渢he rich鈥� and on securities transactions. Like Republicans who target waste and loopholes, Sanders聽聽only that he supports a tax on high-income households that is 鈥渁 damned lot higher than it is right now.鈥�
Republicans have taken to criticizing Sanders and other Democrats for trying to entice voters with government largesse. GOP presidential hopeful Marco Rubio was the latest, describing last week鈥檚 Democratic debate as a competition over 鈥渨ho was going to give away the most free stuff.鈥�
By the standards of Sanders and the GOP tax-cutters, Hillary Clinton seems the very image of fiscal rectitude. While she seems to have a five-point plan for each of society鈥檚 ills, she鈥檚 largely avoided promises of big new spending programs.聽 Her trick, so far, has been to propose relatively small bore ideas that are less substantial in聽both scope and cost than they sound. Her biggest: a higher education plan that would cost about $350 billion over 10 years. Compared聽to her rivals, that's peanuts.
The other day, I asked a friend who has watched politics up close for decades how he thought these pols would eventually pay for their promises. 鈥淓asy,鈥� he said, 鈥淧ixie dust.鈥�
Now I understand. Free stuff.
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