During the October 28 CNBC Republican presidential debate, several candidates proposed tax and economic policies that were later described as “fantasy,” “oddly imaginary,” and even “insane” by media outlets because their implementation would inflate existing budget deficits and add trillions of dollars to the national debt.
Republican Candidates Spar Over Economic Policies In Third Presidential Debate
Reuters: Republicans “Clashed Over Their Tax Plans” During CNBC Debate. An October 29 debate recap by Reuters described how members of the 2016 Republican field argued over tax policy:
The Republicans seeking their party's nomination for the November 2016 election also clashed over their tax plans, with Carson defending his Bible-inspired proposals and former executive Carly Fiorina vowing to reduce the complicated tax code to three pages.
Carson said his plan, based on religious tithing principles, would get rid of deductions and loopholes and constitute a flat rate of about 15 percent that would be sufficient to fund a sharply reduced government.
“Remember, we have 645 federal agencies and sub-agencies. Anybody who tells me that we need every penny in every one of those is in a fantasy world,” Carson said.
Ohio Governor John Kasich was quick to go on the attack against Trump and Carson, calling their tax plans “a fantasy.” Trump's plan for cutting taxes on individuals and corporations has been criticized as an implausible budget-buster by analysts.
“We are on the verge of picking, perhaps, someone who cannot do this job,” Kasich said. “You gotta pick somebody who has experience.”
The remark appeared aimed at Trump and Carson. But inexperience has been among the key questions hanging over the candidacy of the 44-year-old Rubio, who had struggled in previous debates to emerge from the shadow of other candidates. [Reuters, 10/29/15]
Post-Debate, Media Outlets Called Out Candidates' Proposed Economic Plans As Largely Infeasible
Politico: Republican Economic Debate Occurred “In An Oddly Imaginary World” As Candidates “Bemoaned A Nonexistent Fiscal Crisis.” In an October 29 article, Politico's Michael Grunwald explained that the annual budget deficit has dropped by nearly $1 trillion since President Obama took office in 2009, and that “America's fiscal position has improved dramatically since 2009,” despite candidates' arguments that the “right and left are spending us into oblivion”:
If you got all your fiscal information from last night's Republican debate, you would think the federal deficit was exploding. You would also think President Obama had conspired with Washington Republicans to light the match.
In fact, the federal deficit is shrinking. And both Washington Republicans and Obama administration can claim some credit. They've battled far more than they've conspired, but thanks to spending cuts demanded by congressional Republicans, the president's tax hikes on the rich, and a growing economy that the candidates seem to think is collapsing, America's fiscal position has improved dramatically since 2009. If deficits are really “endangering America's future,” as Chris Christie warned last night, they're endangering that future a lot less than they were six years ago.
Paul and Ted Cruz took particular umbrage at the budget deal that Obama forged this week with Republican leaders--a deal that will avoid a crippling default that would have jacked up U.S. borrowing costs and exploded the deficit. On paper, the deal is more or less deficit-neutral over the next decade; the critics point out that it increases spending over the next two years in exchange for future cuts that might not happen, but the extra spending amounts to barely 1 percent of the budget.
It was really a bit surreal to watch the candidates claim the mantle of fiscal responsibility as they bemoaned a nonexistent fiscal crisis, because every one of them--including John Kasich and George Pataki, the closest approximations of moderates in the field--has proposed multi-trillion-dollar tax cuts that independent analysts have said could create a real fiscal crisis. Donald Trump has called his plan deficit-neutral, but in a remarkable on-stage fact-check, CNBC moderator John Harwood said that was about as likely as Trump flapping his arms and flying out of the debate hall. Jeb Bush then pointed out that Trump's plan could cost as much as $10 trillion, which is true--although Bush neglected to mention that his own tax cuts have been scored at $3.6 trillion, potential budget-busters as large as his brother's from 2001 and 2003. [Politico, 10/29/15]
Slate: Republican Candidates Showcased “Insane” Economic Policies During Debate. In an October 29 article, Slate's Jordan Weissmann said that Republican candidates laid out “implausible tax-cut” proposals, promising to cut trillions in government revenues. Wiessmann highlighted Trump's “thoughtless” proposal to lower taxes so much that he would create a “budget-busting, $10 trillion monster”:
Early on during Wednesday night's Republican presidential debate, CNBC moderator John Harwood made a valiant effort to interrogate Donald Trump on the subject of taxes. He failed, but the result was still illuminating. The real-estate mogul had promised to cut the government's tax haul by $10 trillion without adding to the deficit, Harwood noted. How was that feasible?
The exchange was a minor triumph for Trump, whose campaign has been a testament to the complete irrelevance of rational policy debate in the Republican primary, especially when it comes to economics, the subject of Wednesday's debate. Over the campaign, the GOP candidates have rolled out variously gaudy and implausible tax-cut plans, all while promising to keep the country from falling deeper into debt. Even Jeb Bush, the early establishment favorite, has engaged in this sort of magical thinking, offering up a proposal that could cut up to $3.6 trillion from government revenues over a decade, according to the conservative Tax Foundation's high-end estimate. Marco Rubio, who's quickly becoming the new favorite of party mainliners, actually goes further--he'd cut as much as $6 trillion. But Trump's approach is notable for its sheer thoughtlessness. His blueprint is suspiciously similar to Bush's, but with even lower tax rates, resulting in the budget-busting, $10 trillion monster that he says he will somehow balance by cutting government waste.
That, essentially, is the state of Republican policy discourse these days--a debate that's mostly about signaling conservative bona fides rather than detailing a realistic way one might actually run a country. Ben Carson says he's in favor of a tithing-inspired flat tax of about 15 percent, which he will somehow balance out by cutting “fat” from the government. Ted Cruz is promising a flat tax of 10 percent. Both would likely cost trillions. But compared with Bush's or Rubio's plans, they only look like a slight ratcheting up of the crazy. [Slate, 10/29/15]
The New Republic: Economy-Focused Third GOP Debate Was An “Exercise” In “Fantasy.” In an October 29 article, The New Republic's Suzy Khimm wrote that the candidates answered questions about their economic policy proposals by “cocoon[ing] themselves from the truth.” The article noted how the moderators explained that Trump's tax plan would increase the deficit, while Carson's 10 percent flat tax would put “the government in a $2 trillion hole”:
As I wrote before the debate, the debate on CNBC could have--and should have--been an opportunity for the candidates to roll out some tangible, realistic policies targeted to help working- and middle-class Americans, and to counter the 2016 Democrats' laundry list of proposals geared toward working families. Aside from a brief exchange on education reform, that just didn't happen. Instead, what stood out was the candidates' refusal to own up to the details of the one policy they have embraced as an economic panacea for all Americans: Huge, deficit-busting tax cuts that disproportionately benefit the wealthy over ordinary Americans--the same supply-side logic that informed George W. Bush's economic policy.
So the candidates spent the night in a defensive crouch on some of the most detailed--and least realistic--proposals they're campaigning on. CNBC moderator John Harwood first tried to get Donald Trump to confront the fanciful thinking undergirding his $12 trillion tax plan, citing economic experts across the political spectrum who've discredited his assertion that his huge (sorry: HUUGE) tax cuts would somehow pay for themselves. “They said you have as good a chance of cutting taxes that much without increasing the deficit as you would of flying away from that podium by flapping your arms,” Harwood quipped.
The award for smartest and most deceptive dodge of the night goes to Marco Rubio. Harwood pointed out that, according to the Tax Foundation, Rubio's plan would give “nearly twice as much gain in after-tax income to the top one percent as to people in the people in the middle of the income scale.” That is true, even under the most generous assumptions the conservative think tank makes: Under Rubio's plan, the top one percent gains about 28 percent in after-tax income, including dynamic effects; the middle 40 to 50 percent sees just a 16 percent increase. [The New Republic, 10/29/15]