Congress, briefly pausing in its polarized (no Christmas pun intended) impeachment drama, managed to pass a bipartisan budget for 2020 only three or four months late. To do so the bill had to clear the usually McConnell Senate hurdles.
Such a success is almost always evidence of fiscally irresponsible collusion. Sure enough, the budget has something for everyone, especially the American taxpayer who will sooner or later have to pay for all the sugarplums.
The Pentagon gets another $22 billion, and taxes that help make the Affordable Care Act affordable will be eliminated. Those are obviously presents to please Republicans. Democrats won funding for things they like — the National Institutes of Health, the EPA, Head Start, but it’s a bit of a con.
Actually those funds were just a restoration of some of the Draconian cuts made in earlier Trump budgets. Both sides seem to have agreed to a modest pay raise for federal civil servants for the first time in a decade.
So everybody’s happy, right? I suppose, if you don’t count the fact that the toys under the tree aren’t paid for. They will cost another $500 billion in federal debt. So Congress is behaving just like the average family that puts Christmas on the credit card and then has to face the music in the New Year.
This latest fiscal irresponsibility joins the Trump tax cut passed earlier. It took the corporate tax rate from 35% to 21%. That might have been plausible in order to compete with foreign competitors, but only if tax loopholes in the old law had also been eliminated. They weren’t. Even worse, news ones were added.
As a result, according to a recent analysis, 400 of the largest corporations are now paying neither 35% nor 21% in taxes but an average of 11.3%. These hugely profitable enterprises are thus paying a tax rate similar to that of the poorest American households and lower than the rates paid by the top 60% of households, all of those earning $47,000 or more a year.
How generous the American people are to pay a higher tax rate than Amazon, GE, and Boeing. But to be fair, Congress isn’t making us pay it all now. That would be bad for their re-election hopes. It’s a good thing, too, since it would cost every household $180,000 to pay off the current national debt.
Have you got that lying around? No? Well, don’t worry. You don’t have to pay yet. Instead Congress has decided we will all simply go even deeper into debt. The annual deficit topped $1 trillion last year — up 26% over the previous year.
The national debt now totals $23 trillion and is expected to rise $1 trillion a year as far as the eye can see. Or was, until Congress passed the new budget adding another half a trillion. Ho,ho,ho, suckers, and an indebted New Year to you.