Trump’s Voodoo Budget Doesn’t Add Up
When President Trump submits his budget outline to Congress, he’s expected to request a $100 billion increase in defense and law enforcement spending. Spending, he hopes to offset with cuts to discretionary budget items including the EPA, foreign aid subsidies, and across the board cuts to most non-defense related agencies. Ultimately, he’s indicated that the increased spending will be paid for by economic growth generated from repealing Obamacare and enacting tax reform.
There is a legitimate case to be made that we should be spending more on defense, law enforcement, and veterans affairs but the numbers suggest it’s unlikely to find those savings from discretionary spending alone. To cover the costs of Trump’s proposed defense and law enforcement increases, discretionary spending would need to be cut across the board by 10%. Those kinds of draconian cuts would likely impact vital services but it would also face massive push back from Republicans (especially those in swing states) whose constituents would be negatively impacted.
Likewise, fiscal conservatives will likely push back on the assumption of paying for spending with increased growth down the line. Projecting growth is dicey at best, and impossible at worst (try finding an economist that correctly predicted the Great Recession 2–3 years in advance). Economic growth is impacted by countless factors domestic and abroad, and assuming what Congress will pass is never a safe bet.
The reality is that 2/3 of the federal budget is baked into mandatory spending (entitlement programs like Social Security and Medicare). There’s no question there’s waste that can be removed from discretionary spending, but any real long term budgetary relief needs to include reforming entitlements. For his part, President Trump has promised not to touch Social Security or Medicare.
There’s a long tradition of politicians (from both parties) promising to pay for spending with minor cuts, projected growth, and budgetary tricks. Unfortunately, history tells us that this is a formula that will only cause increased pain and bloated deficits.