>>> U.S. BUDGET DEFICIT IS SOARING UNDER PRESIDENT TRUMP,
ACCORDING TO THE TREASURY
DEPARTMENT, THE FEDERAL BUDGET
DEFICIT INCREASED BY $113
BILLION IN FISCAL YEAR 2018.
TRUMP’S FIRST FULL YEAR AS
PRESIDENT, FIRST FISCAL YEAR AS
PRESIDENT.
PRESIDENT. THAT’S A 17% INCREASE FROM 2017.
IT’S THE HIGHEST THE DEFICIT HAS
BEEN IN SIX YEARS.
THE DEFICIT NOW STANDS AT $779
BILLION, AND THE DEFICIT, OF
COURSE, IS THE DIFFERENCE
BETWEEN WHAT THE GOVERNMENT
TAKES IN AND WHAT IT SPENDS.
TODAY SENATE MAJORITY LEADER
MITCH McCONNELL TRIED TO CLAIM
THAT THIS STEEP INCREASE IS DUE
TO THE SOCIAL SAFETY NET.
>> IT’S VERY DISTURBING AND IT’S
DRIVEN BY THE THREE BIG
ENTITLEMENT PROGRAMS THAT ARE
VERY POPULAR.
VERY POPULAR. MEDICARE, SOCIAL SECURITY AND
MEDICAID.
MEDICAID. >> BUT THE DATA POINTS
ELSEWHERE.
ELSEWHERE. ONE OF THE BIGGEST CONTRIBUTING
FACTORS TO THIS DEFICIT SPIKE,
THE GOP TAX CUTS.
ACCORDING TO TREASURY DATA, TAX
REVENUES FROM CORPORATE RETURNS
DROPPED 31% IN THE FISCAL YEAR
2018, COMPARED TO THE SAME
PERIOD LAST YEAR, WHICH WOULD BE
STRANGE BECAUSE COMPANIES ARE
MAKING MORE MONEY THAN THEY HAVE
MADE BEFORE.
MADE BEFORE. CONGRESS KNOCKED OFF MORE THAN A
TRILLION DOLLARS WORTH OF
FORECASTED TAX REVENUE AND
BOOSTED GOVERNMENT SPENDING AT
THE SAME TIME.
IT STANDS IN STARK CONTRAST TO
THE PROMISES FROM TRUMP
OFFICIALS AND FROM CONGRESSIONAL
REPUBLICANS BEFORE THE TAX CUTS
PASSED.
PASSED. >> NOT ONLY WILL THIS TAX PLAN
PAY FOR ITSELF, BUT IT WILL PAY
DOWN DEBT.
DOWN DEBT. >> I’M CONFIDENT THIS IS NOT
ONLY REVENUE NEUTRAL TO THE
GOVERNMENT, BUT ACTUALLY IS VERY
LIKELY TO BE A REVENUE PRODUCER.
>> WE’RE RIGHT THERE IN THE
SWEET SPOT WITH ECONOMIC GROWTH
IT GIVES US MORE REVENUE, WE’RE
WHERE WE NEED TO BE.
>> THE PROBLEM MAY GET WORSE.
AS BLOOMBERG NOTES, THE FORECAST
SPENDING WILL OUTWEIGH REVENUE
BY $973 BILLION IN THE FISCAL
YEAR 2019 AND MORE THAN $1
TRILLION THE FOLLOWING YEAR.
THAT WOULD BE THE FIRST TIME THE
DEFICIT EXCEEDS $1 TRILLION
SINCE 2012 WHEN THE ECONOMY WAS
STILL RECOVERING FROM THE GREAT
RECESSION.
RECESSION. JOINING US NOW ARE AUSTIN
GOOLSBEE, FORMER CHAIRMAN OF THE
ECONOMIC ADVISORS FORZ PRESIDENT
OBAMA.
OBAMA. HE’S CURRENTLY PROFESSOR OF
ECONOMICS AT THE UNIVERSITY OF
CHICAGO.
CHICAGO. BRUCE BART LET ALSO JOINS ME,
ECONOMIST AND FORMER ASSISTANT
DEPUTY OF THE TREASURY UNDER
GEORGE H.W. BUSH.
HE’S THE AUTHOR OF THE BOOK "THE
TRUTH MATTERS."
TRUTH MATTERS." BRUCE, YOU AND I SAT AT THIS
TABLE THAT I’M AT AND DISCUSSED
THE FACT THAT THESE REPUBLICAN
TAX CUTS ARE NOT GOING TO RESULT
IN THE GROWTH THAT THE PRESIDENT
KEPT CLAIMING THEY WOULD TO MAKE
UP FOR THIS DEFICIT.
ANY THINKING PERSON WITH SOME
ECONOMICS BACKGROUND COULD HAVE
LOOKED AT THESE TAX CUTS AND
SAID, YOU’RE GOING TO GET
YOURSELF INTO A BIGGER DEFICIT.
WE ARE WHERE WE EXPECTED TO BE.
IT SHOULDN’T COME AS A SURPRISE
TO ANYBODY.
TO ANYBODY. >> WELL, THAT’S EXACTLY RIGHT.
I THINK IT IS IMPORTANT TO
UNDERSTAND THAT EVERY SINGLE
REPUBLICAN WHO COMMENTED ON THIS
ISSUE A YEAR AGO AND SAID
REVENUES WOULD RISE, OR THAT
THEY WOULD NOT FALL, I’M TALKING
ABOUT PAUL RYAN, MITCH
McCONNELL, STEVE MNUCHIN, THEY
WERE ALL LYING.
THEY’RE LIARS.
THEY’RE LIARS. THEY KNEW THAT THEY WERE LYING
WHEN THEY SAID THOSE THINGS, AND
THEY WANTED REVENUES TO FALL
BECAUSE THEY WANTED THE DEFICIT
TO RISE BECAUSE THEY --
>> WHY, WHY IS THAT?
WHY WOULD I REPUBLICAN WANT THE
DEFICIT TO RISE?
>> BECAUSE WHAT THEY REALLY WANT
TO DO IS CUT ENTITLEMENT
PROGRAMS.
PROGRAMS. THEY WANT TO CUT THOSE PROGRAMS
THAT MITCH McCONNELL TALKED
ABOUT.
ABOUT. SOCIAL SECURITY, MEDICARE,
MEDICAID.
MEDICAID. AND THEY UNDERSTAND THEY ARE
VERY POLITICALLY POPULAR.
THEY CAN ONLY BE CUT WHEN THERE
IS A DEFICIT SO LARGE THAT
PEOPLE ARE FRIGHTENED, AND THEY
FEEL, WE HAVE NO CHOICE.
AND THAT HAS BEEN THEIR GOAL FOR
40 YEARS.
40 YEARS. >> AUSTIN GOOLSBEE, RESEARCH
POLL HAS A 12-POINT SUPPORT FOR
GOP TAX CUTS.
52% ARE STRONGLY OR SOMEWHAT
OPPOSE THE TAX CUTS, WHILE 40%
STRONGLY OR SOMEWHAT SUPPORT IT.
EXAMINE IN A GALLOP POLL FROM
LAST WEEK, IT SHOWS TWO-THIRDS
OF PEOPLE POLLED HAVE NOT SEEN
AN INCREASE IN TAKE HOME PAY
FROM THE GOP TAX CUTS.
HERE’S THE THING.
I’VE SAT HERE AND SPOKEN TO
KEVIN HASSETT AT THE WHITE HOUSE
WHO SAID THE AVERAGE AMERICAN IS
GOING TO SEE A $4,000 INCREASE
FROM THESE TAX CUTS.
I COULD NEVER GET THAT MATH TO
WORK.
WORK. I DON’T THINK YOU COULD EITHER.
>> THAT’S NOT MATH.
OF COURSE THE MATH DIDN’T WORK
BECAUSE IT’S NOT MATH.
#WHERE’S MY $4,000?
>> RIGHT.
>> RIGHT. >> OF COURSE WAGES DIDN’T GO UP
$4,000.
$4,000. OF COURSE THE TAX PLAN IS
UNPOPULAR BECAUSE PEOPLE ARE
LOOKING AT IT.
WHAT HAPPENED?
WHAT HAPPENED? THEY CUT TAXES BY $2 TRILLION
FOR HIGH-INCOME PEOPLE AND LARGE
CORPORATIONS.
CORPORATIONS. AND LO AND BEHOLD, WE LOST
$2 TRILLION.
$2 TRILLION. EXAMINE NOW TO ACT AS THOUGH,
AH, WELL, WHO COULD HAVE THOUGHT
BY CUTTING THESE TAXES THE
DEFICIT WOULD GROW, WE HAVE TO
GO CUT SECURITY.
I’M TELLING YOU, IF THEY ATTEMPT
TO
TO TO CUT SOCIAL SECURITY, THEY’RE
GOING TO BE RUN OUT OF TOWN IN A
LAND SLIDE.
LAND SLIDE. >> IN 2011, WHEN PRESIDENT OBAMA
WAS ATTACKING SPENDING, THIS IS
WHAT PAUL RYAN AND MITCH
McCONNELL HAD TO SAY ABOUT IT
THEN, BRUCE.
THEN, BRUCE. LISTEN TO THIS.
>> HE DOUBLES THE DEBT AFTER HIS
TERM IN OFFICE AND TRIPLES IT BY
THE END OF HIS BUDGET.
HE SENDS OUR DEBT ON AN UPWARD
TRAJECTORY THAT IS COMPLETELY
UNSUSTAINABLE.
UNSUSTAINABLE. >> WHAT’S RECKLESS, BOB, IS THE
$1.6 TRILLION DEFICIT WE’RE
RUNNING THIS YEAR.
>> NOW, BRUCE, THE REASON I
BRING THIS UP IS BECAUSE WE HAVE
ALL ARGUED, MAYBE YOU’VE NEVER
BEEN ON THE SIDE OF THE ARGUMENT
THAT SAID DEFICITS ARE A GOOD
THING.
THING. WE’VE SEEN DEFICITS FOLLOWING
EVERY WAR THAT WE’VE BEEN IN IN
AMERICA, AND SOME RECESSIONS
WHERE THE GOVERNMENT HAS
INTRODUCED STIMULUS SPENDING.
WE LAST SAW IT AFTER THE MOST
RECENT, THE GREAT RECESSION.
SO, IT’S NOT -- SOME PEOPLE
DON’T HAVE A UNIVERSAL VIEW
ABOUT DEBTS AND DEFICITS, THAT
SOMETIMES THEY’RE USEFUL AND
SOMETIMES THEY’RE NOT.
IT DOES SEEM THAT CONSISTENTLY
AS YOU SAID, THE LAST 40 YEARS,
REPUBLICANS ARE CONSISTENTLY
RUNNING DEFICITS WHEN THEY ARE
NOT IN CONTROL OF THE LEVERS.
AND WHEN THEY ARE IN CONTROL OF
THE LEVERS, THEY SEEM TO HAVE
FAR FEWER PROBLEMS WITH T.
>> WELL, THAT’S EXACTLY RIGHT.
REMEMBER BACK TO THE END OF THE
CLINTON ADMINISTRATION WHEN WE
HAD BUDGET SURPLUSES.
>> SURPLUSES.
>> SURPLUSES. >> AND WE HAD SURPLUSES BECAUSE
OF LEGISLATION THAT RAISED
TAXES, THAT EVERY REPUBLICAN
VOTED AGAINST.
VOTED AGAINST. AND THEN WHEN THE SURPLUS
EMERGED, THEY TRIED TO TAKE
CREDIT FOR IT.
AND GEORGE W. BUSH INHERITED
THOSE SURPLUSES, AND THE VERY
FIRST THING HE DID WAS HAVE A
BIG TAX CUT.
AND THEN ANOTHER BIG TAX CUT.
EXAMINE THEN
EXAMINE THEN AND THEN ANOTHER BIG TAX CUT.
IF WE HAD KEPT TAXES AND
SPENDING ON AUTOMATIC PILOT FROM
JANUARY 2001, BY THE END OF THE
BUSH ADMINISTRATION, WE WOULD
HAVE PAID OFF THE NATIONAL DEBT.
SO BASICALLY REPUBLICANS, THEY
JUST MAKE UP THESE LIES ABOUT
THE DEFICIT.
THE DEFICIT. THEY LOVE THE DEFICIT.
THAT IS THE TRUTH OF THE MATTER
BECAUSE THAT IS WHAT GIVES THEM
THE POLITICAL WHEREWITHAL TO CUT
SPENDING, WHICH IS WHAT THEY
REALLY CARE ABOUT.
AND ONLY SPENDING THAT HELPS
PEOPLE.
PEOPLE. THEY WANT TO INCREASE SPENDING
FOR THE MILITARY AND SO THE
TRUTH IS THEY LOVE DEFICITS.
>> AUSTIN, WHAT HAPPENS NEXT?
BECAUSE BRUCE IS RIGHT.
WE’RE GETTING TO A POINT WHERE
CONSERVATIVE ORTHODOX I SAYS IF
YOU’RE RUNNING UP DEFICITS,
YOU’RE GOING TO HAVE TO CUT.
WE KNOW THAT THERE ARE GREAT
DIFFICULTIES IN CUTTING WHAT WE
CALL ENTITLEMENT SPENDING,
SOCIAL SECURITY, MEDICAID,
MEDICARE.
MEDICARE. WE KNOW WE’RE NOT SEEING ANY
CUTS TO THE MILITARY, SO WE’LL
START TO SEE PROGRAMS CUT THAT
ARE EASY TO CUT FIRST.
BUT MITCH McCONNELL HAS ALREADY
SOUNDED THE DRUMS ABOUT CUTTING
INTO ENTITLEMENT PROGRAMS.
IF AMERICANS DON’T SUPPORT THIS
TAX PLAN AS IT IS, ARE THEY
GOING TO GET ON BOARD WITH THAT?
>> NO, OF COURSE, THEY’RE NOT
GOING TO GET ON BOARD WITH IT.
I TELL YOU WHAT’S GOING TO
HAPPEN.
HAPPEN. TWO THINGS ARE GOING TO HAPPEN.
ONE HAS ALREADY STARTED.
THE REPUBLICAN PARTY HAS NOT
LEARNED ANYTHING FROM THIS
EPISODE OF TAX CUTTING, BLOWING
UP THE DEFICIT.
THEY’VE ALREADY PROPOSED WHAT
THEY’RE CALLING TAX REFORM 2.0,
WHICH IS ANOTHER MULTI TRILLION
DOLLAR TAX CUT FOR HIGH-INCOME
PEOPLE IN BIG CORPORATIONS.
AND THE SECOND THING YOU’RE
GOING TO SEE START TO HAPPEN IS
THEY’RE GOING TO TRY TO CUT
ENTITLEMENTS.
ENTITLEMENTS. AND WHEN IT BECOMES HOW OBVIOUS
IT IS UNPOPULAR, THEY’RE GOING
TO TRY BLAME IT ON DEMOCRATS.
YOU’VE SEEN THEM IN THE MIDTERM
ELECTIONS HERE ABOUT HEALTH CARE
AND OBAMACARE.
AND OBAMACARE. THE REPUBLICANS TRYING TO CLAIM
THAT THEY’RE THE ONES TRYING TO
PROTECT THE BAN ON USING
PREEXISTING CONDITIONS, AND THAT
THEY’RE TRYING TO EXTEND HEALTH
CARE TO ALL AMERICANS WHEN THEY
HAVE ACTUALLY BEEN TRYING TO
REPEAL OBAMACARE AND GET RID OF