The White House is attempting to portray this as Trump forcing Washington to clean up its financial act. But some perspective is needed. Since becoming president, Trump enacted a massive tax cut for corporations and many individuals that is projected to add at least $1.3 trillion to the deficit over the next decade (plus additional interest costs), according to the Congressional Budget Office. Then Congress and the president agreed to a two-year budget deal that will add $300 billion more to America's debt, the CBO says.
After approving an additional $1,600,000,000 in spending since December alone, Trump now wants to cut $15,000,000 (or 0.9 percent).
This has been the “worst six months for fiscal policy” Michael Peterson can remember. Peterson is chief executive of the Peter G. Peterson Foundation, a nonprofit that educates America about the debt and its consequences.
The United States is not close to balancing its budget. While that has been the case for many years (since 2002), the picture has worsened in recent months. The result is the country is on track to have to borrow the most money since fiscal 2010. Back then, America was coming out of a deep recession and the government was trying to spend more money to boost growth. Today, the economy is in good shape, and everyone from Goldman Sachs to the International Monetary Fund has been warning Trump now is the time to pay down debt, not take on more.
Experts including Marc Goldwein of the Committee for a Responsible Federal Budget who are concerned about the debt say it is not a bad idea to do an official “rescission” like the $15 billion claw-back Trump is asking Congress for (lawmakers could approve it by a simple majority if they act in the next 45 days). The move was common in the 1990s. Money that was not spent in prior years would be pulled back so it would not be spent on anything else.
There is also broad agreement $15 billion is peanuts and does not merit Trump shifting his image from being the “king of debt” to the “king of deficit reduction.”
“It's not a large spending cut, and it's not going to offset the damage done earlier this year,” said Goldwein, senior policy director for the Committee for a Responsible Federal Budget.
The White House is hinting the $15 billion is just the first round and there will be more claw- back requests coming soon. But even this first request might not make it through Congress, especially the Senate, raising doubts Trump will be able to do any more. Trump is only calling for cuts to domestic spending, not military spending, and Democrats and some Republicans are likely to balk at that.
“This is just a PR stunt,” said Stan Collender, professor of public policy at Georgetown University and a former Democratic staffer on the House and Senate budget committees. He predicts it will be difficult for even the first one to get done with the short time frame Congress has left before lawmakers go off to campaign for reelection.
Trump's rescission call comes days after the U.S. Treasury confirmed it will borrow more than $1.1 trillion this year. That means the Treasury has to issue bonds and hope buyers around the world will keep gobbling them up. Trump is asking Congress to scale back 1.4 percent of the total the federal government plans to borrow this year.
“At this point in U.S. fiscal history, $15 billion is literally a rounding error,” Collender said.