Federal deficits have widened immensely under Trump’s leadership. This is striking not only because he promised fiscal responsibility — at one time even pledging to eliminate
the national debt within eight years — but also because it’s a historical anomaly. Deficits usually narrow when the economy is good and we’re not engaged in a major war.
Trump’s own policies are to blame for this aberration. Specifically, the 2017 tax law, which gave two-thirds of its benefits to the top income quintile last year, added $1.9 trillion to deficits over the coming decade. A grand-bargain spending bill last year that increased funding for both defense and
nondefense programs — here the Democrats deserve a share of the blame — also spilled plenty of red ink.
Trump’s plan for addressing these issues? Extend the plutocratic tax cuts (currently slated to partially expire in 2025), which would add $1 trillion to deficits; double down on defense spending increases (and money for his border wall); and then balance the budget on the backs of the nation’s most vulnerable.
The president’s 2020 budget proposal would slash government spending pretty much across the board on entitlements and other nondefense spending. That includes programs such as food stamps, low-income housing assistance and Social Security disability insurance.
Among the biggest spending categories on the chopping block is health care, even though most Americans want government to do more to improve access to affordable care, not less.
Despite campaign promises to the contrary, Trump’s plan would slash hundred of billions of dollars from Medicare over the next decade. His budget also endorses enactment of the final (and arguably worst) Affordable Care Act repeal bill that failed to make it out of the Senate in 2017, known as
Cassidy-Graham. This would lead to sharp cuts to Medicaid and the subsidies for insurance purchased on the individual market exchanges.
The administration would also mandate that all states impose work requirements on Medicaid, a policy that has been disastrous in the first state to attempt it, Arkansas. Last year, it resulted in more than 18,000
people getting kicked off benefit rolls, with no evidence that it actually promoted work.
“Altogether, the budget would make poverty deeper and more widespread, increase the ranks of the uninsured, exacerbate inequality and racial disparities, and shrink opportunities for those trying to get ahead,” said Robert Greenstein, president of the Center on Budget and Policy Priorities.
The Trump administration says such tough choices will lead to a balanced budget, which it claims it would achieve by 2034. But even that is untrue. In fact, the only way you end up with anything approximating balanced budgets, even with
some of these draconian cuts, is by making delusional predictions about economic growth.
Or put another way: lying to the American people.
Buried in the new budget is a table with the administration’s forecasts for the economy. According to the White House, we should expect gross domestic product growth of about 3 percent as far as the eye can see.
Unfortunately, every independent forecaster or scorekeeper — including the Congressional Budget Office, Federal Reserve, International Monetary Fund and legions of private-sector analysts — says otherwise.
They all predicted that the U.S. economy would experience a short-term burst of growth from Trump’s fiscal stimulus in 2018, and possibly for a year or so after. Eventually, alas, the sugar high will wear off, and we’ll return to our longer-term trend of about 1.8 to 2 percent annual growth. If the track record of recent forecasts is any guide, even those estimates may be too optimistic.
In any case, it’s no accident that the White House’s predictions are so far outside the consensus; Trump needs to promise magical levels of growth to get his math to work. As I’ve said before, a good rule of thumb is that the more economic growth a politician promises, the worse his or her economic proposals probably are.
Now, you could argue that the big lessons of this budget — that Trump cares little about the little guy, and appears generally unconstrained by reality — are things we already knew. Still, every now and then, it is useful to see the president lay it all out so clearly.