President Trump’s corporate tax cuts will likely generate enormous deficits, even if the administration’s rosiest economic forecasts come true, setting Republicans up to claim that the time has come to cut Social Security, Medicare, and welfare to reduce the expected $1 trillion deficit, created by those very tax cuts, over the next 10 years.
Speaker of the House Paul Ryan has already announced that the GOP plans to cut federal health care and anti-poverty programs because of a deficit that his party is about to balloon. “We’re going to have to get back next year at entitlement reform,” he said on a talk-radio show, “which is how you tackle the debt and the deficit.”
This is exactly how what President Ronald Reagan’s budget director, David Stockman, called “starving the beast” works. By creating a fiscal straitjacket through lower taxes, conservatives leave Washington with less money and raise the specter of deficits damaging the economy as a rationale to take away the benefits that millions of Americans depend on. If they are not fiscally conservative right now, they can be when it comes time to talk about spending on the poor and disadvantaged. While the right usually encounters a fierce backlash whenever they try to retrench specific federal benefits, as the GOP recently discovered with their failed attempt to repeal and replace the Affordable Care Act, cutting budgets in the name of deficit reduction has traditionally offered a less toxic mechanism for achieving the same goal.
Republicans are planning to use the deficits created by their own tax cuts to slash the social safety net—but they may end up setting the stage for tax hikes instead.