“The years when we increased deficits are years when the economy will be slowing down,” said Gary Cohn, then director of the National Economic Council. He explained lower rates could lead corporations to shift taxable operations back to the U.S. coming from abroad.
House in addition to Senate leaders used those arguments to reassure Republican holdouts. “We’re right there within the sweet spot with economic growth of which gives us more revenue,” Speaker Paul Ryan declared.
“We fully anticipate,” said Senate Majority Leader Mitch McConnell, “This particular tax proposal within the end to be revenue neutral for the government if not a revenue generator.”
A few skeptics worried anyway. Calling debt “the greatest threat to our nation,” Sen. Bob Corker of Tennessee vowed to oppose the item “if the item looks like to me … of which we are adding one penny to the deficit.”
He had not bad reason for skepticism. Deficits rose after tax cuts under Republican Presidents Ronald Reagan in addition to George W. Bush. Independent economic forecasters, liberal in addition to conservative alike, projected the pattern could repeat.
Ultimately Corker joined fellow Republicans in finding reasons to go along. Having failed to repeal Obamacare, they yearned for a legislative victory.
Some considered tax cuts their highest priority. Others privately welcomed deficits as a prod to shrinking government. Still others resolved their ambivalence by siding with their party.
“There are about as many economists as there are opinions,” said Rep. Tom Cole of Oklahoma. “within the end I’m going to trust the people who are philosophically aligned with me.”
In June, six months after the tax cut passed, Cohn’s successor, Larry Kudlow, claimed the deficit “will be coming down rapidly” due to economic growth. today, the government Trump oversees has demonstrated the opposite.
Even as growth has accelerated, the Treasury reported of which the 2018 deficit swelled to $779 billion. of which level, the highest in six years, marks a 17 percent increase over 2017.
Federal spending as a share of the economy fell. nevertheless revenue fell even more, with corporate tax receipts plummeting 31 percent. The Congressional Budget Office forecasts deficits hitting $981 billion in 2019 in addition to exceeding $1 trillion every year after of which.