The GOP tax bill being rolled out Thursday includes a premise that used to be apostasy for Republicans: new debt of up to $1.5 trillion.
So why is the party of balanced budgets willing to support it?
Because, as several conservatives told our colleague Eliza Collins last week: They need a win on tax cuts.
“If we had a whole bunch of wins on major items up to this point, would we perhaps be a little bit more deliberate in our negotiations? I think the answer is yes,” Rep. Mark Meadows, R-N.C., who chairs the hardline House Freedom Caucus, told USA TODAY. “The fact that we need to put up some major legislative victories … certainly factors into how flexible, I think, a number of us are going to be.”
Tax cuts cost the government revenue; Congress usually tries to offset those revenue losses with increases in fees or taxes elsewhere, or cuts in federal spending. This time around, Republicans are not making a major push for offsets.
As Collins wrote:
With Democrats united against the Republican tax plan, GOP leaders can't afford to alienate moderates in their party by mandating dramatic cuts in domestic spending. Instead, the GOP sales pitch has been that the tax cuts will pay for themselves over time by driving a dramatic increase in economic growth.
Conservative Rep. Scott Perry of Pennsylvania appeared to sum up the party's Faustian bargain:
“Somehow, apparently, you can't do tax reform and save money at the same time,” Pennsylvania Rep. Scott Perry, another Freedom Caucus member, told USA TODAY. “If we've gotta make a choice and either have none or at least have the one, then you've gotta make a choice and at least have the one,” he continued.
So the tax bill Republicans are unveiling Thursday gives away far more money in tax cuts than it recoups in closed loopholes or rate increases. The party is banking on an explosion of economic expansion that will make that giveaway irrelevant.