President Trump’s still-fuzzy proposal to cut $54 billion next year from non-defense spending is ambitious and politically questionable, but it is neither unprecedented nor impossible to achieve.
Budgetary history (of two sorts) shows that savings of such size can, under the right circumstances, be both reasonable and economically productive.
Before delving into the big-picture numbers, let’s allow the disclaimer that not only is the devil in the details but so may be scores of lesser demons. Trump’s details have not been yet released, and may not even have been figured out by the White House itself.
Even for a bloated State Department, for example, Trump’s reported plans for a 37 percent cut in a single year is absurdly unrealistic. The administration says the purpose of its cuts is to finance a $54 billion increase in defense spending, but more than 120 retired generals and admirals signed a letter Monday to congressional leaders saying that such a large slash in diplomatic resources would actually hurt the military and make it more likely that its personnel would end up “in harm’s way.”
It’s also unclear how Trump’s plans for a trillion-dollar investment in roads and other domestic “infrastructure” could occur while the overall discretionary spending category, of which transportation projects are a part, is being pared so sharply. The State Department and infrastructure numbers alone raise fears that when Trump’s actual budget details are revealed on March 16, they may involve numerical sleights of hand and hoaxes that would make P.T. Barnum proud.
Nonetheless, if the Trump administration is serious, thoughtful, careful and focused, its top-line domestic spending goals are clearly within the realm of reason. Here’s why.
First, consider the history. Nobody would accuse former President “I-feel-your-pain” Clinton of having countenanced little old ladies freezing in the street, so let’s use his final non-election, full-year budget (fiscal year 2000) as a baseline for reasonable levels of domestic spending. Indeed, the $283.6 billion in non-defense discretionary appropriations for that year already was $12 billion higher than it would have been if the budget authority had merely kept up with the prior two years of inflation.
Today, if that $283.6 billion were adjusted for actual inflation over the past 17 years, it would amount to $399.9 billion. Even if one also allows a further percentage increase for population growth, on the theory that more citizens automatically entail more federal spending, then Clinton-level government generosity would require domestic appropriations of $459.5 billion.
Trump’s proposal for at least $462 billion (by some accounting measures, the amount could be as much as $45 billion more) matches Clinton with some change left over.
Still, some will argue that such relatively ancient history is irrelevant because the shock of such a large single-year spending cut would not be sustainable.
That, too, is belied by prior example. Trump is proposing domestic spending cuts of no more next year than 10.5 percent (not accounting for a 2.1 percent inflation rate that made the cuts effectively larger). In 1995, after Republicans took a House majority for the first time in 40 years, lawmakers trimmed 7.5 percent in one year from previously appropriated levels (not accounting for a 2.7 percent inflation rate). That’s well within the same ballpark.
Lawmakers achieved those savings in the face of tremendous criticism from the White House (which I, then as a press secretary for the House Appropriations Committee, had to try to counter). This time, Congress has a White House which will provide energetic “air cover” for its efforts.
Even that 1995 Congress was taking a lesser bite, though, than the first Congress under President Ronald Reagan in 1981, which achieved savings that dwarfed what Trump proposes. First, it passed “rescissions” – pulling back monies that had been legislatively appropriated but not yet actually spent by federal agencies – and then it passed further cuts for the following fiscal year. The savings from the 1981 fiscal year to that of 1982 amounted to 13.75 percent of domestic discretionary spending; taking the rescissions into account boosted that to a 17.5 percent drop in actual dollar percentages.
That was when inflationary pressures were pushing in the other direction at a 10.3 percent rate!
Those are a lot of numbers to digest. The bottom line, though, is simple: What Trump proposes is about the same as what the first “Gingrich Congress” achieved, and significantly less than Reagan, especially when considering inflation (or lack thereof).
After both the Reagan and Gingrich efforts, the economy and employment surged, inflation dropped, and poverty rates eventually fell. The demons may await in the details, but the big picture for savings of Trumpian magnitude is one that could prove rather angelic.
Quin Hillyer (@QuinHillyer) is a former associate editorial page editor for the Washington Examiner.
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