Republicans, Tax Cuts, and the Manufacturing of a Crisis

We have a debt crisis staring us in the face. … The problem we have is spending, not taxes. We’ve got to get our spending under control because that’s the root cause of our problem.
-Paul Ryan, speaking in 2011 on Meet the Press

On its face, the Republican tax plan working its way through Congress is not a direct assault on affordable housing. Yes, it would decimate bond funding for affordable projects. Yes, it would eliminate several tax credits that help build affordable housing. And yes, the very rumor of its existence has caused multi-million dollar holes to appear in affordable housing plans for over a year now.

But still, this does not appear to be an assault on affordable housing in the same way that this summer (and fall’s) campaign to repeal Obamacare was an assault on healthcare.

Bruce Bartlett, a former policy adviser to President Reagan, says that appearance is wrong. In a recent op-ed in the Washington Post, Bartlett says that in the minds of many congressional Republicans, the $1.5 trillion deficit resulting from tax cuts isn’t a defect—it’s a primo feature.

That deficit, caused by their tax breaks to corporations and the wealthy, will allow Republicans to double down on arguments like the one Paul Ryan makes above. “There’s only so much money coming in,” Republican leaders will explain. “The responsible thing to do is cut spending.”

Sound overly cynical? Bartlett knows first-hand that it’s not. It’s the same thing that congressional Republicans did in the 1980s after Reagan’s tax breaks. It’s the same thing that they did again in the 2010s (see: Ryan, Paul), in a crisis caused by the Bush tax breaks. And it’s the same thing Kansas Republicans have been doing for the past half-decade as Governor Sam Brownback works to create a tax-free utopia.

In each of these cases, Republicans passed massive tax cuts, then railed righteously against the resulting unbalanced budgets—demanding that social spending be cut to right the ship.

It’s a part of the “starve the beast” movement (the beast being our government and its social programs), another step along the way to making government small enough to drown in a bathtub.

And we’ve already seen what the Trump Administration’s true priorities are for affordable housing—this year they proposed throwing 200,000 low-income families off of rent vouchers, with a significant portion of those families likely to end up homeless.

Congress balked at those plans, with even many Republicans seeing the cuts as unnecessary and cruel. But that calculus could easily change when the mother of all manufactured crises hits.

If this tax bill goes through and the US is running $1 trillion per year deficits by 2020, Republicans will likely be clamoring again to balance the budget—and discretionary spending on things like affordable housing will be among the first things to go.

“The problem we have,” Paul Ryan will piously remind us, “is spending.”

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Republicans, Tax Cuts, and the Manufacturing of a Crisis

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