Now that control of government spending is at Donald Trump's tiny fingertips, he's like an unsupervised kid in a candy shop looking to OD on sugar. He wants it all: major tax cuts, a spike in military spending, massive infrastructure spending, and, of course, his big beautiful multibillion dollar wall. All of this without offsets in the form of tax revenue will balloon the deficit to epic proportions, a far cry from the mantle of "fiscal responsibility" Republicans have been claiming for decades. But that doesn’t bother Trump—he doesn’t care about making tax cuts “revenue neutral” (i.e. continuing to supply the government with the same amount of revenue), let alone cutting spending. Rachael Bade writes:
A number of Trump advisers in recent weeks have privately questioned whether tax reform needs to be “revenue neutral,” according to multiple people familiar with early-stage tax reform discussions. Sen. Rand Paul (R-Ky.) personally reached out to administration officials to argue that tax cuts without corresponding offsets would spur faster economic growth, and conservative groups such as Club for Growth and Heritage Foundation second that idea, bolstering the argument in the eyes of the right.
Oh yes, now that the GOP is control, growing the deficit is a net plus—after years of being the end of the world as we know it. Paul Ryan, if he retains any sense of dignity, should stand firm against tax cuts that aren't revenue neutral.
During a private tax reform meeting with Trump’s chief of staff, Reince Priebus, strategic adviser Steve Bannon, and son-in-law Jared Kushner two weeks ago, Ryan reiterated that stance. And sources familiar with the talks said nobody objected.
Any GOP tax cut is sure to disproportionately benefit the richest Americans, something enough Senate Democrats will oppose to make it a nonstarter for any bill subject to filibuster. That's why Republicans are reportedly eyeing a "fast-track" procedural tool that would require only a majority vote in the Senate to pass it.
But in order to use reconciliation, the GOP tax plan must not add to the deficit over the long term. President George W. Bush ran into that very problem in the early 2000s with his own tax cuts, an obstacle lawmakers sidestepped by having the bill sunset after 10 years. Conservatives complained that Bush and the GOP ballooned the deficit, with massive spending on wars and and an expansion of Medicare. [...]
“That’s always been the plan: You have to be [revenue-neutral], really, for reconciliation, so there’s really no option other than that,” said Rep. Devin Nunes (R-Calif.), a Trump transition official who sits on the Ways and Means Committee.
Contrast that with comments by Heritage Action’s Dan Holler, who argued that less revenue is better and more akin to GOP values: “The federal government has a spending problem, not a revenue problem. Lawmakers do not need to be constrained by ‘revenue neutrality’ as they pursue much needed, pro-growth tax reform.”
Bottom line: Trump either needs to win some Democratic votes with his tax cuts if they’re not revenue-neutral (cuz some Republicans will defect on it) or Republicans will have to keep their tax plan revenue-neutral so that it can succeed on a party-line vote. But just about any way you slice it, the deficit is going to spike if Trump manages to get all his spending priorities through.