Spending cuts

This week we heard a lot about AUKUS, a trilateral initiative between the United States, the United Kingdom and Australia that will revamp the Australian naval fleet with nuclear-powered submarines over the next two decades. President Biden, UK Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese made a show of it in sunny San Diego on March 13, where they officially inaugurated the defense agreement and gave speeches about defending sea lanes and the rules-based international order in the Indo-Pacific. But there was another story here: the Pentagon released a torrent of charts and bureaucratic documents on what it would like to see in the coming year’s defense budget.

Lame-duck sessions of Congress are rarely uneventful. Whether it’s cramming through spending at the last minute or cramming through even more spending at the last minute, our legislature can always be counted on to rubber-stamp bills that lacked political support before Mariah Carey returned to the airwaves. Leading the charge for the opposition this time around is the self-declared speaker of the House, Kevin McCarthy. A Bloomberg headline recently proclaimed that “McCarthy Draws Line on Spending,” and trumpets seemingly blared out from the heavens heralding that Republicans had — finally — rediscovered their fiscally conservative bona fides. But not so fast: this is a script we’ve seen before.

Senate Majority Leader Chuck Schumer knows how to fix inflation: higher taxes. “If you want to get rid of inflation, the only way to do it is to undo a lot of the Trump tax cuts and raise rates,” surmised the New York Democrat to reporters on Tuesday, after meeting with West Virginia Senator Joe Manchin about the budget. “No Republican is ever going to do that. So the only way to get rid of inflation is through reconciliation.” Manchin saw it slightly differently, portraying tax increases as budget reduction tools. He believes debt reduction is “the only way” to fight an inflation problem that threatens to wash away Democratic majorities in Congress.