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Trump's new proposed budget cuts federal government down to size

The Hill logo The Hill 2/27/2017 Justin Bogie, opinion contributor
Trump's new proposed budget cuts federal government down to size © Provided by The Hill Trump's new proposed budget cuts federal government down to size

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On Monday, President Trump began sending preliminary fiscal year 2018 budgets to federal agencies for their review. Word quickly spread that his plan proposed large cuts to - and even outright elimination of - many long established discretionary programs and agencies.

Critics claim that these cuts fail to address the key drivers of spending growth: federal healthcare programs and Social Security. What they miss is that reducing discretionary spending is not just about achieving budgetary savings to control the national debt. Equally important is removing government barriers that inhibit individual and economic freedom, and to eliminate federally-funded corporate cronyism.

Moreover, success in cutting discretionary programs will help to build fiscal credibility and support needed to tackle entitlement programs next.

Agencies are naturally reluctant to accept any proposed cuts - it is the nature of bureaucracy to grow or at the very least, maintain, even when their programs are shown to be wasteful or ineffective. Yet, clearly, decisive, rational action to cut spending must be taken now.

Last month, the Congressional Budget Office (CBO) released budget and economic projections for the next 10 years. They painted a grim picture of the country's fiscal situation.

Assuming current programs remain unchanged, the federal debt will swell by an additional $9.4 trillion over the next decade. At that point, debt held by the public would consume nearly 90 percent of the economy (as measured in GDP). In 2027 alone, federal spending was projected to outpace revenues by more than $1.4 trillion.

Such mammoth overspending doesn't come cheap. In the coming decade, annual interest payments on the debt are expected to rise by more than 184 percent, reaching $768 billion in 2027. Taxpayers would be spending more on interest payments than on national defense.

There is already much gnashing of teeth on both sides of the aisle over the scope and magnitude of the cuts being proposed by President Trump. Almost all federal programs, regardless of their effectiveness and purpose, have their constituencies and invoke outcry when lawmakers try to rein them in.

With the nation's budget continuing down a clearly unsustainable path, we are left with two choices. One option is to continue the status quo, spending with little restraint and piling up additional debt. That option  all but ensures eventual economic disaster. A better alternative would be for Congress to begin to redefine the role of the federal government and to start carefully prioritizing how it spends taxpayer dollars.

In carrying out discretionary cuts, lawmakers should look to certain guidelines to help them decide which programs should be reduced or eliminated.

First, they should seek to eliminate programs that reduce economic opportunity or tilt the playing field to politically-favored industries and corporations.

Next, Congress should carefully examine whether or not the American people would be better served if the program were administered and financed by the private sector or state and local governments.

Finally, they should look to eliminate wasteful and duplicative programs as well as those that have outlived their original intent.

Such an approach will streamline the bloated federal bureaucracy,  empower the private sector and local jurisdictions and stimulate innovation and economic growth. This will also allow for scarce resources to be prioritized toward funding critical defense needs and to begin rebuilding our military capabilities after years of cuts.

Clearly, the time to take action is now. The long-term solution to controlling spending and the federal debt would be to take on major reforms to entitlement programs like Social Security and Medicare, which are necessary to stabilize and sustain those programs.

President Trump's proposed discretionary cuts are an important down payment toward significantly reducing the size and scope of government. In the coming weeks, Congress should look to enact many of these proposals and put the budget on a path to balance. Doing so will reduce the federal debt and spark the economic growth needed to raise living standards for all Americans.

That's a plan everyone ought to be able to support.

Justin Bogie is The Heritage Foundation's senior policy analyst in fiscal affairs.

The views of contributors are their own, not the views of The Hill.

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