Offbeat Trump Tax Cuts Can’t Stop The Impending Fiscal Storm

18:06  14 june  2018
18:06  14 june  2018 Source:   dailycaller.com

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Even sustained economic growth can ’ t steer us clear. But we can weather the storm , with sensible fiscal restraints. The Trump tax cuts appear to have goosed the economy, but reversing (most of) them and spending the money on infrastructure and green energy, as congressional Democrats

Disclosure: The Committee for a Responsible Federal Budget receives funding from the Peter G. Peterson Foundation. The Fiscal Times is separately funded by Peter. How Americans Think the Trump Tax Cuts Will Affect Them This year.

Impending fiscal storm in the USA, Shutterstock/ By Mike Mareen © Provided by The Daily Caller, Inc. Impending fiscal storm in the USA, Shutterstock/ By Mike Mareen

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

We can’t grow our way out of this mess.

The latest government numbers confirm America is sailing straight into a major fiscal storm — perhaps sooner than many expect. The question is not whether, but when. Even sustained economic growth can’t steer us clear.

But we can weather the storm, with sensible fiscal restraints.

According to the latest projections of the Congressional Budget Office (CBO), the national debt is now approaching its all-time high. It has reached $21 trillion, on its way to $29 trillion in 2028. Total federal debt has surpassed 100 percent of GDP. The warning light is flashing.

House passes Trump's plan to claw back $15 billion in spending

  House passes Trump's plan to claw back $15 billion in spending The House voted along party lines late Thursday to pass a White House proposal that would claw back nearly $15 billion in previously approved government funding. The House approved the measure in a vote of 210-206, with conservatives calling it a step in the right direction after they ripped into the price tag of the $1.3 trillion spending bill President Trump signed earlier this year.Trump had pushed lawmakers earlier this week to vote in favor of the plan, known as the Spending Cuts to Expired and Unnecessary Programs Act, which GOP leaders have been working on for two months.

The Trump tax cuts were designed with permanent cuts for corporations and heirs of large estates, coupled with temporary, expiring tax cuts for the middle class. CBO notes in its report that, if realistic assumptions are made about both these categories, then the fiscal picture would grow even worse

Why, tax cuts for almost everyone, of course. "We find the bill would reduce taxes on average for all income groups in both 2018 and 2025," the Tax Policy Center said. Republican strategist to Trump : 'Get a good legal team help now because a storm is coming'.

Uncle Sam is now borrowing just to pay the interest on his past borrowing. Net interest payments consume 7.5 percent of federal spending today, and by 2028 will consume twice that share. By 2023 gross federal interest costs are expected to equal 70 percent of new debt.

We’re sinking in a debt-trap with no turnaround plan in sight.

According to the most recent trustees report, Social Security will run out of money in 2034, just 16 years from now. Seniors will suffer a permanent, 21-percent reduction in their monthly benefits, assuming Congress fails to act. Realistically, Congress will act and Social Security will be saved, but one way or another, we will all get stuck with the bill.

The Trump tax cuts appear to have goosed the economy, but reversing (most of) them and spending the money on infrastructure and green energy, as congressional Democrats propose, would obviously not close the deficit gap — and probably would slow the recovery.

House approves first 2019 spending bills

  House approves first 2019 spending bills The three bills add up to $144.5 billion.The bills passed on a mostly party-line vote of 235-179.

Market-oriented economies such as the U.S. are inherently cyclical, and there are warnings of a cyclical slowdown in 2018. Yet this view is at odds with the increasingly optimistic consensus that economic momentum, turbocharged by President Donald Trump 's tax cuts

They see slowing growth, which Trump 's fiscal stimulus… The question is if tax cuts can offset the cyclical slowdown that is likely to follow. goods. We stopped trying to make many things our people wanted and were buying. Email check failed, please try again. Sorry, your blog cannot share posts by email.

On our current path, a debt-induced financial collapse is in our future and may be closer than we think. That’s why the U.S. Debt Default Clock’s minute hand now stands at “five minutes to midnight.”

To be clear, we’re not in danger of a catastrophic bond default, the kind that can trigger a global economic meltdown. Uncle Sam has sufficient tax revenue to pay every penny of principal and interest on its outstanding Treasury debt, indefinitely.

But there are other kinds of “default”: inflation, tax hikes, spending cuts. Indeed, that sort of “default” is now inevitable.

While spending will grow over the next decade by a cumulative 12 percent, tax receipts will grow by just 11 percent. The deficit will widen from 3.8 percent to 4.8 percent of GDP. And this gap gets bigger the farther one looks.

To close this yawning gap in ten years without tax hikes or spending cuts, the economy would need to grow by about 5 percent a year on average. CBO predicts growth of just 1.6 percent a year.

Spending Cuts Package Faces Uncertain Senate Fate

  Spending Cuts Package Faces Uncertain Senate Fate A nearly $15 billion package of spending cuts is now in the Senate’s court after the House late Thursday voted 210-206 to pass the “rescissions” measure. Most Republicans voted to narrowly put the cuts package over the top, though there were 19 GOP defections. Democrats voted unanimously against the measure. The $14.7 billion collection of cuts from unspent funding will now head to the Senate, where some Republicans, such as Sen. Lisa Murkowski of Alaska, have sounded skeptical of the rescissions effort.

We must continue to stand up against GOP and their plan to give millionaires and billionaires giant tax cuts paid for by. tax hikes on 87 million middle-class and .5 trillion in cuts to Medicare, Medicaid, and more. It is up to all of us to stop them.

Not long after Gov. Andrew Cuomo promised free college tuition to DREAMers, New York launched a lawsuit against the Trump administration over its nationwide tax cuts because they hurt the state’s “ fiscal health.”

On our current path, no plausible amount of economic growth can by itself transform deficits into surpluses. Growth is necessary, but not sufficient. Spending restraint is indispensable.

Why does Uncle Sam live continuously beyond his means? Because he can. He can raise his own credit-card limit. And he can escape some of his debt burden by repaying his creditors in debased currency, via Federal Reserve-generated inflation.

Spending reduction is the least-worst way to minimize the damage. And yet we can safely predict Congress will never reduce spending while it has the power to raise its own credit-card limit. It’s a Catch-22.

Realistically, our only hope is to change the rules. We need to curb Congress’s borrowing power — give it some adult supervision. We need a mandatory co-signer on any increase in the total level of federal debt, which will require a constitutional amendment.

In our constitutional system, the logical candidate for the co-signer job is the states.

Obviously, Congress will be reluctant to give up any of its existing power (see how it has refused to pass a balanced budget amendment). So the states would have to unite to force the amendment through.

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Republicans celebrate the Trump tax cuts . It is perfectly fine for elected officials to pass a bill the public hates, even if we don’ t have any examples of Congress passing a major bill as hated as the tax cuts President Trump celebrated yesterday.

Donald Trump ’s Massive Corporate Tax Cut Literally Cannot Pass Congress. Would such plan waste trillions of dollars padding the pockets of Walmart and Exxon’s shareholders? Absolutely! Would that stop Republicans from supporting it?

It takes 38 states to ratify a constitutional amendment. That means we would need 38 states to agree on, and formally demand, a specific, pre-drafted text. Happily, five states — Georgia, Alaska, Arizona, North Dakota, and Mississippi — have the ball rolling already. They’ve provisionally approved a pre-drafted amendment that would require the consent of a majority of the state legislatures to raise the federal debt ceiling. The amendment would be self-enforcing via automatic across-the-board spending reductions, and it also contains a provision requiring three-fifths congressional majorities to raise taxes.

The five states have entered into a formal interstate agreement, the Compact for America, to help them reach the magic number of 38 states.

A long shot? Sure. But what’s the alternative? We can’t grow our way out of this mess. We also need fiscal restraint.

And the state-led Compact for America is the most serious proposal out there for actually achieving it—and weathering the coming storm.

Dean Clancy, a former senior Republican budget official in Congress and the White House, is a volunteer advisor to the Compact for America Educational Foundation and a member of the Debt Default Clock Review Committee. The opinions expressed in this article are his own. Follow Dean on Twitter.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

Senate Rejects White House Plan to Cancel Unused Funding .
Two Republicans, Richard M. Burr and Susan Collins, broke with their party to oppose the plan, which was intended to broadcast fiscal responsibility.WASHINGTON — The Senate rejected on Wednesday a White House plan to rescind nearly $15 billion in unspent funding that had been approved in past years. Two Republican senators joined Democrats to defeat what had been a largely symbolic effort.

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