The swamp is as swampy as it is thanks to $3.5 trillion in federal spending that washes through Washington every year. Draining it requires that vast amount of money be reduced.
President Trump will speak about spending cuts in his address to Congress on Tuesday night, but if he leaves entitlements alone, the swamp will remain.
The federal government took in $3 trillion last year and borrowed the remaining $500 billion. Borrowing at that pace eventually forces interest rates up and would produce irresistible pressure for drastic cuts.
The more Washington spends, the more businesses will cater to the government instead of to consumer demand. A society’s wealth isn’t best measured in terms of gross domestic product but in terms of how much people have what they need and want. When the government takes a fifth of the economy, the public has less say.
The biggest winner in the distortion of the economy is Washington itself, which is why four of the five wealthiest counties in America are within commuting distance of the U.S. Capitol. They float on the federal fiscal flood.
Cutting federal spending is important, and Trump has pledged “big league” cuts. Sadly, there is a reason to doubt that he will do so, because most spending (63 percent last year) is on entitlement programs such as Social Security, Medicaid and Medicare, and he has made them sacrosanct.
“We are not touching those now,” Treasury Secretary Steve Mnuchin said last weekend, “So don’t expect to see that as part of this budget, OK?”
Right away, that means nearly two-thirds of the budget is off limits. Add the 7 percent of the budget that is debt interest payments and Trump is left with only 30 percent of the budget from which to find his savings.
That 30 percent is gallingly referred to as “discretionary spending,” as though the public and its elected representatives genuinely had no choice about it. And half of discretionary spending is on defense, which Trump plans to increase that.
Defense is, and should be, on a separate and more important plain than other budgetary areas, for protecting the nation and its people is the federal’s government’s pre-eminent duty.
America’s military capacity has dwindled in the past several years, and renewal is overdue. But that should not be taken as a license to splurge. White House budget chief Mick Mulvaney ought to take advice from his former self, Rep. Mick Mulvaney, who in a 2013 op-ed wrote, “It undermines Republicans’ credibility on spending issues if we’re not willing to also look at the defense budget for possible savings.
We are not here definitively advocating for defense cuts. But nor should the Pentagon escape the scrutiny of a sharp fiscal eye. It may be that defense spending needs to rise overall to meet national security needs, but those increases must be accompanied by the hard decisions, for example about military base closures, that produce savings but prompt howls of protest from lawmakers who want to protect federal dollars flowing to their districts.
A vague promise to trim wasteful spending only in the shadow of a massive increase is not enough. Profligate spending on ships, planes, other equipment and personnel will not be camouflaged by minor displays of frugality in marginal areas.
Non-defense discretionary spending is 15 percent of the budget. Even if Trump and Congress somehow cut every agency by 20 percent, which would be unprecedented, it would still produce only a 3 percent reduction in overall spending at a time when borrowing already finances 18 percent of the budget.
Elections have consequences, and Trump did not campaign on a program of fiscal conservatism. He rejected Speaker Paul Ryan’s prescription for root and branch reform of entitlements. Instead, he adopted the Democrats’ strategy of promising not to cut benefits and suggested that the financial shortfall might be met by faster economic growth.
Faster growth, spurred by cutting regulations and by tax reforms, is certainly possible. But fiscal discipline is also necessary. It is a comforting fiction, to put it no more strongly, that the president can cut the budget deficit while ignoring entitlements.
The economic health of the country requires fiscal discipline, and the new president needs to be willing to administer it. It won’t be easy and it won’t be fun, but it’s what statesmanship demands.
