Trump's budget proposal moves priorities in the right direction, but doesn't really cut spending at all

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Published by: Dan Calabrese on Thursday March 16th, 2017

When are we going to address this for real?

What you've heard described as the "Trump budget" in recent days is not quite that. The total federal budget is likely to exceed $4 trillion in fiscal year 2018. The Trump proposal only deals with what's called "discretionary spending," which basically means everything apart from Medicare, Medicaid and Social Security.

The document released by the White House yesterday only deals with about $1.065 trillion of that spending - a tiny decrease from the enacted 2017 equivalent of $1.068 trillion. That's a real spending cut, not only by Washington standards but also by yours, although it may prove insignificant because no one knows where entitlement spending will end up. And as you can see by doing the math, entitlement spending has exploded as the major portion of the federal budget and will continue to do so.

But let's look at the discretionary spending Trump is proposing - understanding of course that Congress never actually passes the budget the president proposes. In fact, it will almost certainly vote it down unanimously, not because it's terrible but becaue Congress wants to set its own spending priorities, yet is obligated to consider the budget proposed by the executive branch.

Fine. So let's you and I consider it for a moment. If you believe national defense should be a higher priority than the previous administration did - and I do - then you'll probably be glad to know Trump recommends an additional $54 billion for the Pentagon. If you think Homeland Security and veterans deserve more, you'll also be glad. If you think we should spend less on the State Department and the EPA, while zeroing out things like public broadcasting and the National Endowment for the Arts, you have a lot to go thumbs-up on here.

But here's the problem: The bottom line number doesn't really change. The last Obama budget looked to add more than $500 billion to the national debt. And while Trump's first budget generally shifts priorities in the right direction (cutting items that are less deserving and increasing items that are more deserving), the federal government still looks to spend about the same amount of money overall in 2018 as it's spending in the current year. That means that unless federal revenues jump significantly, we're adding another $500 billion or so to a national debt that's getting awfully close to $20 trillion.

I understand the imperative of rebuilding the military. And I appreciate that Trump offset that increase with cuts elsewhere. For the most part, neither Republican nor Democrat presidents did that. But Trump also talks of balancing the budget and paying down the debt. These are absolute imperatives, and the best way to do it is to seriously reconsider the amount of money Washington spends - and reduce it wherever possible.

GDP growth for Obama's final year? A measly 1.6 percent

Herein lies the rub: Like it or not, the real money is in entitlements. This is often described as the "third rail of American politics," which is kind of a weird metaphor for a guy like me who lives right next to train tracks. The basic idea is that no one dares to touch them because the political heat would be too great. Senior citizens, who vote in greater numbers than any other demographic group, are sure to punish anyone who touches their Social Security or their Medicare.

But there won't be any Social Security or Medicare if the nation is bankrupt, and if they're not reformed and soon, that is going to happen. The constituencies for this programs is expanding rapidly, and the base from which to fund them is not. The left will argue that Social Security actually pays for itself, which is true in one sense but that's not the whole story. Social Security taxes (which show on your paycheck as FICA taxes) have traditionally collected enough money to cover contemporaneous Social Security benefits, although it's getting close to a tipping point where that will no longer be true.

But in reality, Congress raids FICA revenues every year and spends them on other priorities. There is no Social Security trust fund with money sitting in it. Money comes into Washington, money is spent by Washington. Nothing is in a lock box and nothing is sacred. If Social Security really was able to support itself, that would be an argument for privatizing it. In fact, Social Security is only "solvent" to the extent taxpayers - the majority of whom aren't getting any benefits from it while they're paying in - are bankrolling it.

That simply has to change. There are simple ways you can start the process, like means-testing it, raising the age for benefits and eliminating the income cap on the FICA tax. But we simply can't spend close to $3 trillion a year on entitlements and expect to survive fiscally. It's not going to work. Eliminating some of the federal government's obligations under ObamaCare will help, but we have to be much more serious than anyone - including Trump, at least to date - has been about reforming these entitlement programs.

That's why the 2018 budget plan doesn't show any serious reduction in spending. The hard work that could make that possible hasn't even really started yet. I'm still concerned that even with Republicans in charge in Washington, there may not be the stomach to do it. And if that's the case, it won't matter that we defeated Hillary. America will still not make it.

Dan's new novel, BACKSTOP, is a story of spiritual warfare and baseball. Download it from Amazon here!