The tax cut pushed by President Donald Trump and Republicans in Congress is already being seen in paychecks when withholding tables were adjusted this month, and some companies have cited the corporate tax cuts as reasons for employee bonuses.
We think that there’s a connection between those events and a bit of an uptick in the president’s approval ratings. With the possible conclusion of a budget deal this month, leading to new federal spending on both the military and in many domestic agencies, the economy is also likely to get another boost.
The economy is getting mixed reviews on Wall Street, with some traders apparently fearing a move by the Federal Reserve to raise interest rates more sharply in the coming year.
Meanwhile, Louisiana is in line to get significant federal aid as part of an effort to address Congress’ failure to provide enough money in a timely fashion after the disastrous floods of 2016. It’s included in a larger aid package that helps Texas, Florida and Puerto Rico, too. Disaster-related expenses are going to come up to come up from time to time; that's the nature of emergencies, and we're glad that Congress has extended much-needed aid to Louisiana.
But the new spending on Capitol Hill, coupled with the tax cuts, underscores the degree to which Uncle Sam's books don’t balance.
We doubt that there will be a celebratory tweet from the White House if, as some predict, the new spending and tax cuts boost the federal deficit to the $1 trillion level. The last time it was that high was early in President Obama’s first term, as automatic emergency spending came into play because of the unemployment and falling economic output caused by the Great Recession of 2008.
Now, the economy is doing better, much better. But the appetite for adding to the budget deficit seems as politically attractive as ever.
Deficit hawks have a point. "This budget deal shows just how broken the budget process is, that Congress thinks the only way to agree to a budget is to put hundreds of billions of dollars on the nation's credit card," said Maya MacGuineas, president of the Center for a Responsible Federal Budget, which routinely deplores federal spending practices.
U.S. Sen. Bob Corker, R-Tenn., said the measure amounts to "doubling down on the irresponsible mentality in Congress of spend-now-pay-later."
We do not begrudge the money spent on struggling families trying to rebuild in Louisiana, nor in Texas or elsewhere. Many federal expenditures are essential. As a nation, we probably don’t spend enough on roads, bridges, rails and airports; the president is poised to push for more spending on infrastructure this week.
But these billions add up to real money and will significantly add to the debt that the nation carries forward into the lives of our children and grandchildren if ends are not squared with means.
That Congress has failed to make hard choices, quarrels endlessly, and then unites in a bipartisan frenzy to run up debt ought to give everybody cause to think — indeed, worry -- about the future of the country.