Former World Bank leader Robert P. Beschel reports in the Atlantic that Republicans prefer to “focus on spending—when they’re not responsible for it,” and this has obscured the fact that the U.S. is bankrupting itself through decades of tax cuts.
But voters are catching on to the ruse.
“The U.S. collects significantly less money as a share of GDP than comparable countries, and less than it has taken in historically,” Beschel writes, ranking 32nd out of 38 nations for the revenue it collects as a share of GDP. When federal revenues peaked in 2000 (the Clinton years), Beschel said the U.S. enjoyed “a $128 billion surplus, and the Congressional Budget Office projected that the national debt would be paid off by 2009.”
But that was before the Republican Party successfully pushed a string of tax cuts since Clinton. Now, he says, The U.S. is experiencing “a structural deficit with potentially dire fiscal consequences.” And Republican voters know it.
“The … base has become more populist in temperament and more working class in character, and low-income voters are less sympathetic to tax cuts that mainly favor their high-income peers,” said Beschel. “Recent polling by the Pew Research Center reveals that a plurality of Republicans and Republican leaners actually prefer raising taxes on households with incomes greater than $400,000, by a margin of 43 to 27 percent.”
Cracks in the GOP’s anti-tax orthodoxy are appearing among MAGA voices like Steve Bannon, who Beschel said recently came out in favor of a tax hike on the wealthy to finance middle class cuts. It also includes Vice President J. D. Vance and Project 2025 head Russell Vought, who both have expressed interest in raising taxes on those earning more than $1 million a year, according to Beschel.
Not that this keeps the party from running from reality, Beschele adds. Republicans have again taken “revenue increases off of the table,” this year and saddled themselves with an "unsolvable fiscal conundrum."
“Cuts on the order of 27 percent across the entire federal budget would be needed to bring spending in line with revenue. If major categories of expenditure such as Social Security, Medicare, defense, and debt servicing are exempted, spending cuts alone cannot tackle the deficit,” writes Beschele.
Republican fiscal hawks like Sen. Rand Paul (R-Ky) are calling to target those social safety net programs, but Beschele says other party members are alarmed at the “grave political risk” as the GOP’s burgeoning middle class feels the pain of that.
Additionally, party members are worrying that voters are finally seeing the widening maw of debt coming for them even as the GOP remains unwilling to change course.
“[T]he GOP’s $10 trillion secret—the amount that tax cuts have contributed to the national debt—is that, if forced to choose, many on the anti-tax right would prefer bigger deficits to higher taxes,” said Beschele, a senior nonresident fellow with the Middle East Council on Global Affairs.
But the U.S. “no longer has that luxury,” he adds. The government’s interest payments have now become larger than its defense expenditures. Debt-rating agencies are downgrading the nation, and bond traders are demanding higher yields on U.S. treasuries and putting the value of the U.S. dollar at risk.
“To redeploy [Sen. John Thune’s (R-S.D.) phrase, something is ‘seriously wrong’ with a party that worries about running deficits yet refuses to consider any sustainable way to pay for them—and instead slashes services to its rural and working-class constituents,” Beschele said.
Read the full Atlantic report at this link.
