This is one of those conversations which I’m sure nobody wants to have at the dawn of a new GOP controlled administration. While I hate to be the wet blanket at the party, it’s time for a serious discussion about the first Trump budget which will be unveiled in the coming weeks. It would be fun to continue celebrating the administration’s early efforts to improve security, roll back regulations and generally drive the Democrats insane. But if this new era of GOP control is to have any lasting and meaningful legacy Congress is going to have to have a long and serious conversation with the White House on the subject of fiscal conservatism. Rumors are already running wild about the total price tag for some of the Trump administration’s plans and budget hawks are getting understandably nervous. (Politico)
President Donald Trump wants to rebuild the nation’s roads and bridges, boost military spending, slash taxes and build a “great wall.” But Republicans on Capitol Hill have one question for him: How the heck will we pay for all of this?
GOP lawmakers are fretting that Trump’s spending requests, due out in a month or so, will blow a gaping hole in the federal budget — ballooning the debt and undermining the party’s doctrine of fiscal discipline.
Trump has signaled he’s serious about a $1 trillion infrastructure plan, as he promised on the campaign trail. He also wants Republicans to approve extra spending this spring to build a wall along the U.S. southern border and beef up the military — the combined price tag of which could reach $50 billion, insiders say. And that’s to say nothing of tax cuts, which the president’s team has suggested need not necessarily be paid for.
It’s always best to provide some sugar to help the medicine go down, so congressional leaders should be ready to praise Donald Trump’s early efforts at cost-cutting. The federal hiring freeze, the staffing reductions at Cabinet level agencies and other price slashing measures in the executive branch are all admirable, and the White House deserves praise for these moves. But still, the total savings will probably add up to something in the range of a couple hundred billion dollars if we are lucky. With the federal government preparing to spend upwards of $4 trillion (assuming that no other significant changes are made) that’s still simply not enough to eliminate the deficit and put us on a path toward reducing the national debt.
This is part of the debate which Ed Morrissey and I have had on these pages going back a couple of years. I still maintain that having a spending problem and a revenue problem are not mutually exclusive. In order to tackle a beast the size of our fiscal dilemma we need to examine the bottom line and remember that tax cuts alone do not solve the problem because previous tax cuts have never paid for themselves. You need a combination which adds up to less money going out than comes in to achieve success. In the past this has meant either raising taxes or reducing or eliminating popular programs. Nobody ever wants to do either so we’ve traditionally adopted an attitude of whistling past the graveyard and pretending that the debt monster wasn’t about to engulf us.
The president has a lot he wants to accomplish, much of it laudable, but Congress will need to assume the role of taskmaster and insist that all of these plans be paid for. Returning to the tax cut idea, this is a necessary and important component of the overall plan. Lower taxes for both consumers and employers stimulate the economy and drive the growth which is required for long-term sustainability. But at the same time, tax cuts eat away at the available pool of resources required to achieve the basic functions of government. “Starving the beast” sounds great on paper as long as you remember that if you do it for too long the beast eventually dies.
This means more of the “tough medicine” I’ve mentioned here before. Discretionary spending is simply not a deep enough well to draw from and our current needs for the military mean that defense spending can’t sustain serious reductions without dangerous global consequences. What does this mean? It means that Congress is going to have to tackle the question of changes to entitlement programs. Nobody wants to hear that and the president himself has made populist statements about not touching these programs. Sadly, that’s simply not within the realm of reality anymore.
Selling the public on this is going to be a daunting task and it may very well cost Republicans heavily in the midterm elections. But you need to ask yourself if this is indeed the hill worth dying on. If you truly believe in fiscal conservatism and grasp the danger the nation faces when our debts reach the point of crippling us then the answer is yes. The GOP has been given a remarkable gift by the voters in the form of control of both chambers of Congress and the White House. If we don’t do this now it’s simply not going to get done and we’re going to be leaving a ruined wasteland to the coming generations.