Karl W. Smith, Columnist

Republicans, Deficits and the Two-Santa Theory

If you think budget shortfalls violate conservative economic principles, you've forgotten Reaganomics.

February 9, 2018 at 5:20 PM UTC

Karl W. Smith is a Bloomberg Opinion columnist. Previously, he was vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina.

Conservative? Yes. Deficit hawk? No.
Source: Hulton Archive/Getty Images

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With his signing of a budget deal Friday morning, a Republican president has now joined forces with a Republican-controlled Congress to increase the projected 2019 deficit from $710 billion to $1.15 trillion. And that's in just two months, the time it took to add spending increases to the effect of the $1.5 trillion tax overhaul enacted in January.

It's hard to miss the contrast to the Republican fiscal hawkishness that was on display in 2010, when House Speaker John Boehner negotiated a series of budget compromises with President Barack Obama. For today's Republicans, the appeal of tax cuts and military spending trumps everything. In Boehner's day, Republicans argued that the deficit was an existential threat, and that shutting down the government was a painful necessity if it meant preventing the deficit from spiraling out of control.