Donald Trump’s Budget is a Statement of His Priorities

Congress is usually not kind to presidential budgets. That historical pattern is unlikely to change with President Trump’s recently released “America First” budget. As conservative commentator Charles Krauthammer said on Fox News:

This is a budget, like every other one I’ve seen in decades that I’ve been here, it is dead on arrival at Capitol Hill. Capitol Hill is a huge morgue of presidential budgets. There is not one that actually croaked into life. They all come in dead. They are wish lists. They are expressions of one’s interests, and a way to respond to promises.

That doesn’t make President Trump’s budget unimportant. Indeed, it’s a powerful expression of his vision for the federal government – one that seeks to re-invest in defense, which is much needed given the erosion of the budget and military readiness under President Obama, and one that seeks to remove power from federal agencies and devolve it back to the states. But, as Ed Rogers writes for the Washington Post, this budget could also steer clear of the budget morgue and lead to some fundamental changes in how Washington thinks about taxpayer money:

The question at hand is whether President Trump can shake up the status quo and do something different to avoid what usually happens. It doesn’t help that every dollar spent has an engaged constituency fighting for its inclusion in the budget. Neither does the fact that spending advocates have been so successful in bringing a kinder, gentler vocabulary to budget battles. They’ve eroded support for budget realism. “Slowing the rate of spending increases” has become “cruel budget cuts.” Every dollar spent is now deceptively characterized as an “investment.” . . . What? If you put it like that, endless spending doesn’t seem all that bad – it doesn’t sound like money going down a rat hole. I’m sure most government spending is some sort of “public investment.” Whatever that means. The problem is that there are more good ideas than there is money to fund them. This is nothing new. In his 1989 inaugural address, President George H.W. Bush said, “We have more will than wallet, but will is what we need.” He couldn’t have been more correct.

Donald Trump, like many Republicans before him recognizes that the government’s current rate of spending is unsustainable. Our $19 trillion national debt means that each taxpayer carries an astounding $166,000 burden on their shoulders. Indeed our debt has grown so large that interest payments to investors are projected to become one of the largest line items in the federal budget.

That reality should give everyone, not just conservatives, pause. It means that more dollars will have to be paid to investors in Treasury debt, like China, which means fewer dollars for discretionary spending programs that Democrats love. It also means that ever-higher spending levels will require tax hikes that cannot be paid for by the wealthy, but must instead be increasingly borne by the middle- and working-classes.

If we can agree then that higher deficits and debts are a poor long-term choice, there are relatively few paths that can lead to balance. One of them would be to raise taxes on everyone, a simple non-starter for Republican and President Trump, who believe that Americans, especially middle-class Americans, are already overtaxed, and that our corporate tax rate is already the highest in the industrialized world.

Another path would be to embark on substantial entitlement reform. Medicaid, Medicare and Social Security, in addition to debt service, make up about three-quarters of the federal budget and are growing rapidly as the population lives longer and ages gradually. Neither Democrats nor President Trump believes this is appropriate at the moment, and it was notably left out of the president’s budget outline.

“I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” Trump said during the campaign.

And that really only leaves one option: A leveling of the amount the federal government spends on domestic discretionary programs. This is the path that President Trump took in the current budget. Unsurprisingly, Democrats and their media friends found plenty of things to complain about (tellingly, their biggest gripe turned out to not even be true). But, if you accept that an increasing deficit is unsustainable and that entitlements can’t be touched, there’s not a tremendous amount of places to balance the budget.