Small Budget Cuts Mean Nada If Trump Won’t Touch Entitlements

Would your family try to balance the books without considering the cost of the mortgage, college education, or taxes? Most people wouldn’t allocate household expenses like that, not least because any such budget wouldn’t stay balanced for long.

That analogy resembles the “budget” the Trump administration delivered to Congress on April 3. Not only did the document come two months late — federal law requires the president to submit his budget on the first Monday in February — but it also came incomplete, ignoring some of the largest and fastest-growing elements of the federal fisc.

Small Document

Officially, the budget document clocked in at 92 pages. But 22 of those pages consist of the title page and blank pages between the document’s (very short) chapters and sections. Take out things like the table of contents and list of contributors, and the budget shrinks even further to about 60 or so pages.

Granted, the document I refer to only summarizes a much more fulsome budget submission. The Office of Management and Budget (OMB) and various Cabinet agencies and sub-agencies submit many thousands of pages to Congress, including historical charts, granular details, and technical appropriations language for lawmakers to consider when drafting legislation.

But the budget summary encapsulates the sum total of the policies OMB sends to Congress. Normally, the back of that document also contains a series of summary tables listing the various proposals suggested by the administration. But this year, rather than totaling dozens of pages, the budget’s summary tables run to only about four pages — because the administration doesn’t have many fiscal policies to propose.

Mandatory Spending (Largely) Untouched

With at least one small exception, the administration proposed no changes to mandatory spending — i.e., spending that Congress has put on “auto-pilot” and which will continue ad infinitum unless lawmakers act to rein it in. This category of spending includes entitlement programs such as Social Security, Medicare, and Medicaid, and far exceeds the discretionary spending on which the budget focused.

Some in the press originally claimed the administration had not proposed any changes to mandatory health programs. That isn’t quite right: The budget would eliminate Obamacare’s Prevention and Public Health Fund. But this proposal got buried in a footnote on page 37 of the Department of Health and Human Services’ budget in brief. And while other similar nuggets may exist in other departments’ submissions, the size of these types of minor proposals will not make a major dent in our nearly $2 trillion annual deficit. Furthermore, burying the proposals in footnotes suggests they aren’t a priority.

The near-total silence on the lion’s share of federal spending makes about as much sense as a family drawing up its budget without examining its largest sources of spending. With all the current focus on fraud and abuse, could OMB not come up with a single policy change to fight fraud in Medicare or abuse of the disability system in Social Security? Or anything to claw back wasteful spending on agricultural subsidies that, by artificially lowering the price of sugar, increase the incidence of chronic disease? Or ask federal bureaucrats to pay a bit more in pension contributions?

Less Domestic Spending

On the plus side, the fiscal document did propose a sizable 10 percent decrease in non-defense discretionary spending. That includes double-digit percentage reductions to the discretionary portions of eight Cabinet departments: Agriculture, Commerce, HHS, Housing and Urban Development, Interior, Labor, State, and Treasury. 

Unfortunately, however, the portion of the budget excluded from these reductions dwarfs the share to which they would apply, assuming Congress even enacts them. While the budget proposes less than current-year spending for non-defense discretionary appropriations, it also is less than meets the eye in the literal sense. The Trump administration’s unwillingness to contemplate reductions in the meat of the federal budget makes the document smaller and less relevant than in prior years.

Doubtless, the administration wished to avoid political attacks about Republicans “cutting” Medicare, Medicaid, and Social Security before the midterm elections — doubly so while simultaneously proposing a sizable increase in defense and military spending. But with our “debt bomb” rising ever higher, the perpetual avoidance techniques will only worsen the political pain needed to get our fiscal house in order when that bomb finally detonates.