McConnell-Schumer budget deal just keeps the spending going

Key Points
  • Senate leaders from both parties have made a budget deal that will boost defense and domestic spending.
  • This comes as our national debt is already soaring and just as interest rates are on the rise.
  • Not even the "Disruptor-in-Chief" Donald Trump seems willing to slay the sacred spending cow.
Senate Minority Leader Charles Schumer, D-N.Y., right, and Senate Majority Leader Mitch McConnell, R-Ky.
Tom Williams | CQ Roll Call | Getty Images

After the New York Mets finished their inaugural 1962 season with an historically disastrous 40-120 record, manager Casey Stengel consoled the team with this famous bit of humor:

"Fellers, don't feel bad. This was a team effort. No one or two players could have done all this."

It's the same way in Washington when it comes to our $20.6 trillion debt and the wild, irresponsible spending that created it. No one party, president or ideology could have done all this. No matter how deep the partisan divide appears to be in American politics, each side works together consciously and unconsciously to sink the nation into an ever-deepening ocean of bills we can't pay.

The Obama years saw the biggest explosion in the total debt. On January 20, 2009, when he was sworn in, the debt was $10.6 trillion. On January 20, 2017 it was $19.9 trillion. But his predecessor, President George W. Bush presided over a much larger increase in the debt percentage wise during his term when the figure basically doubled from about $5.5 trillion to that near $11 trillion dollar number in 2009.

Since 1970, we've had a grand total of four years that didn't have the federal government finishing up in the red. Those years were 1998-2001 when the Clinton administration and the Republican Congress made a welfare reform deal, lowered capital gains taxes, and federal revenues soared thanks to a tech sector surge.

Now, Senate Majority Leader Mitch McConnell says he and Democrat Senate leaders have made a deal that could help the nation avoid shutdown wars for at least that long.

Great news, right?


It turns out that near-deal is nothing like the Clinton-Newt Gingrich pact of the late 1990s. Instead, this is built on a mutual wink and nod from both sides to keep spending money like crazy. The Republicans, at President Donald Trump's behest, are looking to increase military spending by more than $150 billion over the two-year budget period. The Democrats are getting a smaller – but still-massive – increases in domestic spending.

The deal is not a sure thing, as the deficit hawk members of the so-called House Freedom Caucus are vowing to defeat it. But unlike the tax reform plan, this budget plan would presumably get Democrat votes and could pass regardless of any Freedom Caucus protest.

If enough of those anti-spending Republicans don't get on board, it would then be up to House Speaker Paul Ryan and McConnell to dare to bring the possible bill up for a vote despite so much opposition from their own party.

That bit of vote-counting intrigue is a drama that will play out over the next couple of days. But what's not really in doubt is that the majority of Congress and the White House are just fine with driving our deficits and debt higher.

Nothing seems to be able to stop this spending wave, including a recent spike in interest rates that will make borrowing to pay our bills a more costly and troubling exercise than government shutdowns.

Just as worrisome is the fact that this is yet another budget deal that further delays the most important fiscal reforms America has needed for decades. That is, we need to radically reform the "Big Three" spending components that are the most unsustainable: Defense, Social Security and Medicare.

The long-held conventional wisdom is that each of those items are a "third rail" issue that no politician can touch. But there's a lot of evidence that the American people are in favor of fair reforms to Defense, Social Security and Medicare – provided they're done transparently and with as much voter input as possible.

But this deal apparently doesn't even take a knife to discretionary spending, something the Trump administration proposed doing in a big way just last year.

Meanwhile, the federal government took in a record $390.8 billion in income tax revenue from October through December 2017. It still found a way to run up a $225 billion deficit in that period.

The Constitution gives Congress the power of the purse, though, so the chances of this ending any time soon seem like nil. Even the infamous U.S. credit rating downgrade of 2011 didn't cure Washington's spending addiction. It's scary to think what it would take to scare D.C. straight.

There's no denying Trump's election and his style of governing have disrupted Washington in many ways. Yet whether it's tax reform or this nascent budget deal, Washington's wild spending ways aren't among the sacred cows Trump seems to really want to slaughter.

That leaves the taxpayers of today and the future with a very costly golden calf.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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