You don’t hear much about the deficit anymore.
It was only a few years ago that trillion-dollar budget gaps and the ever-rising national debt were the singular preoccupation of lawmakers in Washington—particularly Republicans. The federal fiscal imbalance, Senator Mitch McConnell said in 2012, was “the nation’s largest long-term problem.” Former Speaker John Boehner warned the following January that deficits and the debt were “killing the economy.”
Buoyed by increasing revenue from an improving economy and tax increases in 2013, along with spending caps enacted in 2011, the deficit has shrunk by more than half since the early Obama years, to $439 billion in fiscal 2015. And as the gap has declined, so has the urgency on Capitol Hill. The new House speaker, Paul Ryan, made his name proposing budget plans aimed at tackling the nation’s long-term debt. But when he laid out his policy vision for the party during a major address last week, he never mentioned either the budget gap or the $18 trillion national debt.
And by the end of this week, bipartisan majorities in Congress could pass a sweeping tax package that adds as much as $700 billion or $800 billion to the deficit over the next decade. The legislation, which is still being negotiated along with a $1.1 trillion year-end spending bill, would make permanent and in some cases expand tax credits and deductions that lawmakers usually revisit on an annual or biannual basis. And it could delay the collection of taxes enacted as part of the Affordable Care Act in 2010, including the politically contentious “Cadillac tax” levied on high-end health insurance plans.