Former President Donald Trump’s GOP platform doesn’t have much to say about reducing the federal government’s ballooning $35 trillion debt. The 28-page document adopted by Republican delegates this week — which was personally blessed by Trump — made no mention of the country’s debt burden save for a lone reference to cutting “wasteful spending.” For a party that had counted deficit reduction as a staple of its official agenda for decades, the topic’s irrelevance as a political talking point marks the end of an era. And it’s a reflection of ascendant GOP populists who eschew the party’s traditional hymn book when it comes to economic messaging. “In many places in the country, this isn't top of mind,” Rep. David Schweikert (R-Ariz.), a longtime deficit hawk who is also vice chair of the Joint Economic Committee, told MM. “The political class — whether it be on the right or the left — haven't told the truth because it's too painful.” If you ask fiscal watchdogs or Wall Street CEOs, pain is what’s in store if the U.S. doesn’t get its fiscal house in order. “We've missed our chances to deal with this problem in a preventive way,” Mitch Daniels, a former Republican governor of Indiana who also led the Office of Management and Budget during President George W. Bush’s administration, said in an interview. “One day we'll have that reckoning.” Ratings agencies have already signaled they’re losing faith in the ability of U.S. leaders to meet fiscal challenges as Congress becomes more polarized, injecting uncertainty around basic functions like raising the debt limit or certifying election results. The International Monetary Fund’s chief economist, Pierre-Olivier Gourinchas, on Tuesday warned that expansionary federal spending policies in an era of near-full employment and growth pose “risks to both the domestic and global economy.” What would that mean for the real economy? More government borrowing will cause interest rates to climb. That will make it more costly to finance the social safety net and government services. And it will make borrowing more expensive for everybody else. BlackRock founder and Chairman Larry Fink warned earlier this week that the burdens would ultimately be borne by “our children, our grandchildren.” Fink’s comments echo what had long been a popular line of attack by GOP policymakers. Republicans invoked the demands that would be placed on “future generations” because of the federal debt load in their 2016 platform. That was also the case in 2012. In 2008 they called for a balanced budget amendment. In 2004, they said Bush and Republican leaders in Congress would cut the deficit in half within five years. Annual deficits climbed during the Trump years and exploded when the Covid-19 pandemic unleashed a wave of federal stimulus that required trillions in government borrowing. During his first term, Trump approved $8.8 trillion of gross new borrowing and just $443 billion in deficit reduction, per a recent Committee for a Responsible Federal Budget analysis. The previous generation of Republican leadership might have gagged at those figures. And to be sure, there has been plenty of grousing about the borrowing that occurred under President Joe Biden — who’s overseen $6.2 trillion of gross new borrowing approved against $1.9 trillion in deficit reduction, per CRFB. Asked for comment on the debt’s omission from the platform, the RNC responded with a statement from Trump spokesperson Karoline Leavitt contending that inflation is due to Biden’s “out-of-control spending.” But the debt’s absence from the official GOP platform reflects how marginal this issue has become — at least politically. “There are certain laws of gravity, right?” said Mark Epley, a partner at the law firm Arnold & Porter who was previously general counsel to former House Speaker Paul Ryan, a leading Republican deficit hawk. “It's not going away. One of the mysteries is: How does this breakthrough as a matter of public concern?” Republicans “still have visions of the 1990s” in their approach to reducing annual deficits, Schweikert said. Reducing wasteful spending, fraud or foreign aid won’t go far enough, he said. The same is true of Democratic plans to raise revenue by taxing the rich. The continued failure to address this issue could turn the bond market into the “single most important driver of U.S. policy,” he said, referring to the higher yields that investors will demand from the government to buy Treasurys. “Not wars. Not a president. Not Congress. It's the winds of the bond market.” IT’S WEDNESDAY — If you’re a Republican who longs for a GOP platform that’s more 2012 than 2024, give me a ring. Send tips and suggestions to ssutton@politico.com and @samjsutton. If you’re in Milwaukee, say hey to Victoria Guida (vguida@politico.com) and Zach Warmbrodt (zwarmbrodt@politico.com). And if you can’t make it, be sure to catch their POLITICO Grill panels online.
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