Trump’s Fantasy Budget
by Jerry Jasinowski
It was perhaps inevitable that President Trump would submit a radical budget proposal to Congress, and his decision to be out of the country when it arrived on Capitol Hill was no doubt calculated. Otherwise he would be here trying to defend the indefensible.
The major theme of the President’s budget is to reduce spending, but it conspicuously omits any reference to the elephants in the room -- Social Security and Medicare. Thus we are left with a blunt assault on poor people: $610 billion cut from Medicaid and the Children’s Health Insurance Program over 10 years; $190 billion cut from the Supplemental Nutrition Assistance Program; $15.6 billion from the Temporary Assistance for Needy Families block grant; $72 billion from the Social Security disability program; and $63 billion from federal retiree benefits – to name a few.
Mick Mulvaney, Trump’s head of the Office of Management and Budget, insists radical changes are necessary to rein in the deficit and curb the growth of the national debt. He is right about that, but reasonable people can and will question whether this is the right way to go about it. Even Mulvaney’s former colleague in the Freedom Caucus, Rep. Mark Meadows (R-NC), was taken aback by this draconian budget plan. He said he could not go along with proposed cuts in food assistance for older Americans. “Meals on Wheels, even for some of us who are considered to be fiscal hawks, may be a bridge too far,” he said.
The White House wants us to believe that these spending cuts along with tax cuts will spur economic growth from its current anemic 2 percent a year to 3 percent or more. Such a strong jump in economic growth would in fact resolve a variety of social ills and reduce the budget deficit, but there is no credible economist who believes this plan will achieve that.
What the economy really needs is an infusion of new workers buying consumer goods and paying taxes. Mulvaney has expressed his hope that cutting back on social programs will prod millions of poor people to rejoin the work force. That is possible but unlikely to offset the millions of workers being chased out of the country by the Trump Administration’s crackdown on immigration – legal and otherwise.
The result of Trump’s budget would be to increase the deficit, add to the national debt, make the rich richer and leave millions of poor people hungry, destitute and without health care. The same Republicans who loudly lament the federal deficit are promoting tax cuts, not because they will boost economic growth, but because they go to wealthy supporters.
But the politics of this fantasy budget poses a major threat to the Republicans. The same struggling people who voted for Trump will be taking it on the chin. They will figure it out eventually and the Republicans will pay for it in the next election cycle – which is not far away.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements. May 2017
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