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Commentary By Diana Furchtgott-Roth

President Trump Should Have Made Even Deeper Cuts in Washington's Bloated Budget

Economics, Economics Tax & Budget, Tax & Budget

But the least that Republicans can do is support his budget as is

On Thursday President Trump released his proposed budget for fiscal 2018. It would increase defense spending by $54 billion and cut the budgets of other government agencies by the same amount.

He wants to trim executive-branch agencies with a chain saw rather than with pruners. The State Department would get a 28% cut, the Environmental Protection Agency would get a 31% reduction and the Labor Department would get a 20% decrease. Gone are a wide swath of programs that could be funded by the private sector or individual states, such as the National Endowments for the Humanities and the Arts, the Corporation for Public Broadcasting and the Overseas Private Investment Corporation.

“Washingtonians are complaining [about the proposed budget], but those who do not live on the coasts are undoubtedly cheering.”

Although many in Washington are saying the sky is falling, Trump has not moved to cut Social Security and Medicare, the main sources of the budget deficit. That would have the most effect in reducing government spending in the future. When he issues a fuller 10-year budget, it is to be hoped that he will include even more cuts.

Cutting entitlements would be a welcome change. Although the U.S. economy is doing better than most of its competitors, our government for the past 15 years has been spending with abandon, increasing debt to dizzying levels. Concern about deficits was abandoned in 2002 after the attacks of Sept. 11, 2001. Debt today is a staggering $20 trillion.

Wasteful and duplicative government programs cost taxpayers billions annually, according to the Government Accountability Office. America has over 90 anti-poverty programs, 17 food-aid programs and 22 housing-assistance programs. The federal government even pays over $150 million for “official time” for union officials who happen to be federal civil-service employees in practically all its agencies. These officials work for their unions rather than for the taxpayer.

To make Trump’s budget a reality, Congress must pass it as a budget resolution. One would expect that a Republican Congress would pass a Republican president’s budget, but senators and representatives often have their own priorities — such as getting reelected. That means retaining expenditures within their states’ borders.

Legislators are required by law to pass spending bills for the next fiscal year by Sept. 30, a rarely met deadline that has existed for more than 40 years. The Senate and the House have eight months to develop budget resolutions and to complete the appropriations process now that the president has submitted his budget request. If all goes according to plan, this would be the first year since the 1990s that Congress would meet all the deadlines.

In the absence of a congressional budget, the federal debt has tripled from less than $6 trillion in 1997 to $20 trillion today. Interest on the debt totaled more than $433 billion in fiscal 2016, higher than the combined budget surpluses achieved in the late 1990s. Those payments represent money that people cannot use on more worthwhile activities.

Enormous deficits have been financed in recent years through a mixture of continuing resolutions, stopgap measures to keep the government temporarily funded, and massive omnibus bills consisting of traditionally separate appropriations bills. Continuing resolutions allow Congress to postpone spending decisions to a more politically feasible time, while smaller appropriation bills get lumped together into an omnibus bill to prevent closer scrutiny on specific agencies and programs. That needs to change.

The failure of Congress to execute its legal responsibility in favor of scoring political points was emblematic of legislators’ inability to reform antiquated policies that have become major barriers for economic growth and budget stability, especially entitlements, the tax code and immigration laws.

Americans deserve representatives who develop responsible budgets for the federal government, carefully consider legislation that affects millions of Americans, and work to reform policies that needlessly inhibit economic prosperity. That is the platform on which President Trump was elected. Washingtonians are complaining, but those who do not live on the coasts are undoubtedly cheering.

In the 1990s, with a Republican-controlled Congress and a Democratic president, a divided government noted for its stark ideological differences was nonetheless able to develop a balanced budget that generated surpluses for several years. With both the presidency and Congress in the hands of Republicans, budget cuts should be able to become reality.

This piece originally appeared on WSJ's MarketWatch


Diana Furchtgott-Roth is a senior fellow and director of Economics21. She also served on the transition team for President Donald Trump. Follow her on Twitter here.

This piece originally appeared in WSJ's MarketWatch