‘Trump Accounts’ Strain GOP Fiscal Credibility

In the annals of political vote-buying, one of the most arrant must be the proposed $1,000 giveaway to every newborn under the moniker of “Trump Accounts.” The scheme, working its way through Congress in the GOP budget bill, is a reminder that former presidents had the tact to keep their names off of federal welfare programs. Otherwise would Social Security accounts be “FDR Pensions” and Medicaid known as “LBJCare”?Politicians used to be content on the hustings merely to kiss babies. Now, per the GOP budget proposal, there’s to be a donation for every tot courtesy of Uncle Sam — but ultimately courtesy of the taxpayers who keep the Washington gravy train running. The $1,000 handout to every newborn was a bad enough idea under the name of “MAGA Accounts,” short, to be clear, for “Money Account for Growth and Advancement.” Renaming the accounts for a president still in office adds enough egotism to the idea to make even the most ardent Nanny Stater blanch. These columns have already lamented how the $1,000 accounts, along with Governor Hochul’s $400 “inflation refund” checks in New York, break the economic law that there’s no free lunch. Both of these direct handouts also run the risk of repeating the runaway inflation that followed Covid stimulus checks.After all, we marked, the $5 trillion in government stimulus spending — including $1.8 trillion directly to individuals — helped trigger the Biden-Schumer inflationary wave that saw prices rise some 20 percent during the previous administration. “It’s a matter of Economics 101, supply and demand, that all this extra money chasing after the same level of products and services would lead to higher prices,” we noted.That hasn’t deterred Mrs. Hochul from her plan to spend $2 billion of New York taxpayers’ money by sending out checks of up to $400 each under the guise of abating inflation. Even some in her own party object to what one state senator, James Skoufis, calls a “gimmick” and an attempt at “self-promotion” by Mrs. Hochul, who is up for re-election next year. Better for New York to lower taxes permanently, rather than make this one-time handout. The proposed Trump Accounts, too, take a page from the left’s playbook and the socialist vision of “cradle-to-grave” government assistance for the citizenry, who, in the liberal conception, are wards of the state from birth. More broadly, it reflects a new blurring of the lines between America’s two major parties. The GOP is born to be the party of low taxes, fiscal rigor, sound money, personal responsibility, and limited government. These principles, historically, marked a contrast with the modern Democratic Party that has its roots in the Tammany Hall model of governance. That was the regime, pioneered in New York City, that saw politicians forge a pact between the voters — who pledged fealty to the party — and the government, which offered cushy jobs, welfare benefits, costly public works projects, and even turkeys on Thanksgiving. High taxes and corruption were endemic.Over the 20th century, this model was adopted wholesale by the Democratic Party — right down to the old Tammany tactic of fostering large-scale immigration and hurrying the newcomers onto the voting rolls. A whole raft of entitlement programs like Social Security, Medicaid, Medicare, food stamps, and welfare for single mothers, added billions of dollars — now trillions — to the federal budget, sending taxes and debts soaring and crimping economic growth.Republicans learned to their chagrin that once these programs were gifted to the voters, and once costs surged far beyond expectations, the entitlements came to be seen as sacrosanct. Feature Obamacare, which was nicknamed for a president and which passed Congress as an exercise in Democratic partisanship, raised a host of constitutional concerns, and sent health insurance premiums soaring. Yet the GOP appears unable or unwilling to scale back the program.Would Trump Accounts prove as enduring? Better to leave the money in the hands of the taxpayers who earned it. If Republicans want to make a gift to future generations, it would benefit today’s newborns more to get federal spending and taxes under control, and stanch the growth in the national debt, than to set up new entitlement programs based on federal handouts — no matter for whom they’re named.

‘Trump Accounts’ Strain GOP Fiscal Credibility

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