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.