I complain loudly about this every year. I don’t know why I do, because it never does any good. But I do it anyway. What I’m talking about is President Trump’s new proposed federal budget for fiscal year 2020, which he submitted to Congress on March 11.
Trump’s new budget, entitled “A Budget For a Better America,” is the largest in history at $4.75 trillion, up from an estimated $4.41 trillion for FY2019 which ends on September 30, and up from $4.12 trillion in FY2018. The budget goes up every year, no matter who is in the White House! The last president to balance the budget was Bill Clinton in 1998-2001.
Trump’s latest record-setting $4.75 trillion budget, which will not be adopted by Congress, includes an estimated budget deficit of $1.01 trillion, with additional $1+ trillion-dollar annual deficits to follow. Trump’s new budget calls for spending cuts on several domestic programs while increasing the military budget significantly. His budget also includes $8.6 billion for the border wall. The Democrats will oppose all of that; some Republicans will too.
The White House Office of Management & Budget (OMB) bragged that the new budget “shows that we can return to fiscal sanity without halting our economic resurgence.” Fiscal sanity? They’ve got to be kidding!
The OMB admitted that under the president’s latest plan, the budget doesn’t balance until 15 years from now – and that’s using some very optimistic (and unrealistic) economic assumptions and no recessions. Fat chance!
The Committee for a Responsible Federal Budget (CRFB), a bipartisan, non-profit public policy organization in Washington, DC, welcomed the budget’s proposals to slow the growth in spending in various domestic programs, but also cautioned:
“However, the budget is riddled with gimmicks and unrealistic assumptions. In particular, it hides the cost of extending tax cuts in its baseline, circumvents budget caps in order to extend recent defense hikes through a war spending account, and relies on incredibly rosy economic growth assumptions.” [Emphasis added, GDH]
For reasons I don’t understand, the Department of Defense is not included in the chart above. Trump’s budget proposes increasing military spending by apprx. 5% over the 2019 level.
As usual, most lawmakers in Congress will ignore Mr. Trump’s new budget, with Democrats calling it “dead on arrival.” Democrats might allow for some increase in military spending but only if it includes similar increases in domestic spending. If that’s where this ends up, the budget will be even larger than the already record $4.75 trillion submitted by the president.
The CRFB estimates that Trump’s new budget would add $10 trillion to the national debt of $22+ trillion over the next 10 years, if adopted. If so, that would put Trump on par with Barack Obama in terms of ballooning federal debt.
All this leaves us with another budget battle just ahead and another possible government shutdown. Here we go again.
One reason I voted for Trump was that I hoped a political outsider like him, with a strong business background, might be the first president in decades to actually reduce the federal budget and try to get a handle on our hopelessly out-of-control spending. I was wrong about him.
Shortly after taking office, Trump said reducing the debt was not a priority for him. He admitted that a debt crisis is very likely coming, but then added that he thought it would not happen until he was out of office. What a cop-out!
I could go on ranting about President Trump’s latest budget request, but as noted above, it doesn’t do any good. The budget goes up every year. I have criticized every recent president who did this, all the way back to Ronald Reagan when he started running large budget deficits.
I’ve been repeatedly warning about rising federal debt for over 30 years, with a prediction that it will end very badly at some point. I suspect that most of my clients and readers agree. I was warning about the runaway national debt back when it was only a couple of trillion. Now it’s over $22 trillion.
Obama exploded the national debt in his eight years in office, from around $10 trillion to $20 trillion, as never before. Now Trump proposes adding another roughly $10 trillion over the next decade. While I’ve been wrong for a long time about our ballooning national debt leading to a major financial crisis, I continue to believe that this will happen at some point.
Sadly, fewer and fewer Americans seem to care about the debt these days. The more debt the better, many seem to believe. Half of the country is on some form of government assistance. While our national debt has exploded far higher than I thought was possible, I still believe I will be correct in the end.
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