While President Donald Trump proposed slashing $3.6 trillion of government spending, his 2018 budget proposal barely tackles any serious entitlement reform, with $610 billion in Medicaid cuts over a decade. From the campaign trail to the Oval Office, Trump has refused to acknowledge the urgent need for entitlement reform, especially for Social Security and Medicare.
If these programs aren’t reformed, millennials will have no security blanket in their elder years.
Although Trump favors cuts to agencies like the EPA, they’re discretionary spending and account for a minute fraction of the annual government budget. Like most agencies under the previous administration, however, they have abused its regulatory authority — such as enacting the Clean Power Plan, which Trump rolled back along with 22 other environmental regulations.
Entitlements constitute at least two-thirds of the federal budget and are the primary driver of the ever-increasing national debt, now at $20 trillion. If Trump does not reverse course, according to the Congressional Budget Office, the debt is projected to constitute 86 percent of GDP in 2026 and 141 percent in 2046. As the American Enterprise Institute found, entitlement programs will constitute 14.2 percent of GDP, almost four times as much as in 1970 (this includes the Obamacare subsidies).
“The United States is not Greece, but it is still instructive to observe what has occurred there and elsewhere when debt levels have soared,” AEI’s James Capretta wrote in 2015. “At some point, countries with high levels of public debt pass a threshold above which continued borrowing to cover expenses is prohibitively expensive or infeasible.”
Capretta added, “When they reach that point, the only available path forward is painful and immediate austerity.”
Despite the bloating of entitlements, for millennials, the biggest benefit in the proposed budget is the reform of federal loans which will decrease the deficit by almost $50.26 million. This proposal seeks to necessarily undermine the vicious cycle of undergraduate borrowing from the government, which in turn enables colleges to increase tuition nonstop. For example, the budget includes Pell Grant reform and increases.
“The spending plan supports year-round Pell Grants, which allow low-income students to use the money for three semesters of college, instead of two,” the Washington Post reported. “That way, students can take a full load of courses year-round and earn a degree faster.”
Nonetheless, according to the Heritage Foundation, “The major entitlements and interest on the debt are on track to devour all tax revenues in fewer than 20 years.”
Despite different reasons, according to the latest GenForward poll, Americans between the ages of 18 and 34 disapprove of the proposed budget, including 68 percent of respondents saying they’re against Trump’s proposed $54-million increase in military spending.
Bottom line: No entitlement reform ensures no safety net for millennials. This is one of the most pressing issues which must be solved sooner than later. Just as lawmakers remarked that Trump’s budget proposal is “dead on arrival,” so too should his quest to not reform entitlements. While paying off student debt may be appealing to millennials, the government not paying off and reforming the biggest contributor to the national debt would have severe consequences for future generations.
