Are "Deficit Hawks" Prepared for Trump's Proposed Spending Cuts?
January 20, 2017
Senior Fellow Pam Villarreal writes at NCPA's Taxes and Retirement blog:
It's amazing how those who cared little for spending deficits during Obama's presidency have suddenly become deficit hawks just hours before Trump's inauguration. (Paul Krugman, are you listening?) The national debt is now $20 trillion, double what it was eight years ago. In all fairness President Obama was not responsible for all of this due to mandatory spending programs that long existed before he did. But during his eight years of what could arguably constitute wasted taxpayer money -- a failed $800 billion failed stimulus package, bank bailouts and green energy boondoggles -- there was little concern from the mainstream media, left of center think tanks and anybody who hammered previous Republican presidents over deficits.
Enter Donald Trump. Our dynamic modeling results of Trump's proposed tax plan show that the intergenerational (debt and deficit) effects will no doubt be substantial.
- Despite vigorous GDP growth and job creation, deficits under the Trump plan would be 42 percent higher than the baseline CBO estimate.
- Over a 30-year period, the net present value of total deficits under the Trump plan would be $53 trillion, almost double the CBO's estimate of $28.9 trillion under current law.
Yes, this should be of concern to both Democrats and Republicans. But they should be of concern by both Democrats and Republicans during any presidential administration.
But to his credit, Trump is taking a proactive approach and proposing spending cuts of about $10.5 trillion over 10 years. While newly-evolved deficit hawks are clutching their pearls over his wish list of cuts such as eliminating the National Endowment for the Arts and privatizing the Corporation for Public Broadcasting, these ideas are nothing new. Many a taxpayer has questioned the need for government to subsidize art and educational programming. Also on the list are reductions in some duplicative programs from the State Department, the Department of Justice and the Department of Transportation. These are actual recommendations from the Government Accountability Office's 2016 Annual Report, which was produced under the Obama administration.
It will be a tough road to pass any spending reductions in Congress, but it is worth a try. The newly-evolved deficit hawks like Krugman and those who have always recognized the danger in runaway spending should be pleased!
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