Remember the 2012 Republican National Convention? Back then, the national debt problem was so fundamental to the GOP’s platform that the convention’s set design showcased a debt clock ticking away in real-time, edging closer to $16 trillion.
Vice presidential nominee Paul Ryan, a conservative tax and budget expert, championed policies that slowed the debt’s alarming rate of acceleration toward what he deemed a dangerous fiscal cliff, which was not a priority for his opponent.
When Barack Obama was elected in 2008, the debt was $10 trillion. After fighting the Great Recession, it nearly doubled to $19.5 trillion by the end of his second term.
Most problematic is how gross domestic product has failed to grow commensurate with the debt. There has been a school of thought that downplayed the growing red ink, instead touting the debt-to-GDP ratio as more relevant. A brief history of that ratio demonstrates why that “school” has closed.
Interestingly, the ratio dipped to 30.86%, the 1970s lowest level, during the month when Richard Nixon resigned as president, August 1974.
There are no tax increases or new gas taxes proposed in a GOP-led bid to craft a bipartisan infrastructure proposal. But the plan would index the nation’s 18-cent gas tax to inflation for the first time, which would likely raise the tax over time.
Sen. Mitt Romney, a Utah Republican and one of the negotiators, told reporters in the Capitol Wednesday the gas tax indexing proposal is one of the ways the GOP wants to pay for an infrastructure package that can garner support from Democrats and President Joe Biden.
“There are no user fees that are part of the package,” Romney said. “Other than the fact that we have ongoing gas tax, for instance, and the package does propose that we index the gas tax to inflation.”
The federal gas tax is 18.4 cents for unleaded and 24.4 cents for diesel.
The gas tax would be tied to inflation by linking it to the Consumer Price Index. The CPI rose annually by 1.7% on average over the past decade, according to government statistics.