Donald Trump has released new details regarding his economic policies. (Jabin Botsford/The Washington Post)

Donald Trump announced yet more changes to his economic agenda last week, including his first definitive comments on how he would approach federal spending.

Trump endorsed a set of budgetary goals known as the "penny plan." Congress would reduce discretionary spending by 1 percent each year excluding defense, Social Security, Medicare and Medicaid.

Trump's campaign, however, did not provide any details about how he would achieve these reductions. He did not identify specific programs that would receive less funding, or discuss by how much their budgets would be reduced. The campaign's statement on federal spending consisted of 91 words in a fact sheet, leaving little room for the nuts and bolts.

Figuring out how to meet Trump's goals would be no small task. The 1 percent reductions would quickly add up.

Ordinarily, federal outlays increase each year. As the population grows and the economy expands, the federal government can be expected to spend more each year on public services, such as law enforcement, education, housing assistance, medical research and transportation.

Trump, by contrast, would reduce spending annually. As a result, more and more spending would have to be eliminated to keep the budget within Trump's limits each year, and the effects on agencies and public programs would accumulate.

For example, spending outside of defense and entitlements will total $602 billion this year, according to the Congressional Budget Office. Reducing spending by 1 percent would entail limiting those outlays to $596 billion in 2017. Yet the office also projects that spending in this category will increase to $615 billion next year. For Trump to meet his goal of a 1 percent cut from the previous year, he would in fact have to reduce next year's budget by 3 percent.

After a decade, Trump would be reducing spending in this category by 23 percent annually, relative to current projections of future federal costs.


Trump had signaled his endorsement of the penny plan before. The plan, he said recently, "is something that, as simple as it is, I’ve always sort of liked."

Yet in Trump's other statements on federal spending, he has laid out ambitious goals for his administration if elected — goals that could be difficult to achieve while reducing the discretionary budget by 1 percent each year.

Trump has pledged to build a wall along the border with Mexico and to triple the number of Immigration and Customs Enforcement officers focused on deportation. Homeland-security expenses are included in this category of the budget are not considered defense outlays.

Estimates of the cost of the wall range from $15 billion to $25 billion. In 2013, the Congressional Budget Office estimated the cost of hiring 5,000 additional officers at $5.4 billion over five years. A document from Trump's campaign suggests he would increasing staffing by at least twice that much.

Those figures do not include other expenses related to Trump's immigration-enforcement priorities, such as requiring all American businesses to electronically verify that their employees can work legally in the United States.

Trump has also said that he wants to spend substantially more money on transportation and infrastructure. Trump's Democratic opponent Hillary Clinton has proposed spending at least $275 billion over five years, and last month, Trump told Fox Business Network he would spend "at least double" that amount, or about $110 billion each year.

Another question about Trump's plan is whether it would force the government to borrow more money each year. Trump has proposed radical reductions in federal spending, but he has proposed even greater reductions in taxes. If the government spends more than the taxes it takes in, it must borrow to make up the difference.

Trump's advisers have suggested that his proposal on taxes would reduce revenue by about $300 billion a year. The reduction in spending, according to the campaign, would be just $100 billion a year — adding some $200 billion to the annual shortfall. Trump's advisers argue that reduced taxes would close the gap by stimulating the economy, allowing businesses and households to pay more in taxes.

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