The Resistance To Cutting The Federal Budget

Howls of protest erupted after President Trump temporarily paused federal spending to ferret out waste. A hyper-partisan cacophony in Washington claimed it was practically unAmerican to fiddle with funds that Congress had already approved as part of the 2024-2025 fiscal year budget. 

Trump's move is a precursor to the upcoming budget battle, the defining issue of his first term.  Expect a fear mongering campaign orchestrated by the media and Democrats to cast spending reductions as a threat to the poor, veterans, seniors, the unemployed and low income Americans. 

However, ignoring the federal spending binge is no longer an option. The budget ballooned to $6.75 trillion for fiscal year 2024, resulting in a deficit of $1.933 trillion.  For perspective, spending increased 45% in just a single year from 2019 to 2020, nearly 20 times the average of the previous four decades.

Deficit spending has hiked the nation's debt to more than $36.2 trillion. America's indebtedness is increasing $5.93 billion every day.  The current budget contains $952 billion allotted to servicing the debt. Interest payments on debt amount to 13% of the federal budget, eclipsing defense spending.

No amount of Congressional caterwaul should deter the Trump Administration from surgically removing pork and waste from the federal budget.  The president's Department of Government Efficiency (DOGE) is already serving up ideas to trim the fat, a lightning rod for Democrat resistance.

In its first move, the DOGE budget cleaver severed more than 104 diversity, equity and inclusion (DEI) related contracts at 25 federal agencies, saving taxpayers more than $1 billion. A total of 21 Treasury Department contracts were ended, saving $25 million in a single agency.

Democrat naysayers who huffed that shaving the federal budget was next to impossible were left red-faced. The irony is that the party of big government once championed slashing federal spending when Democrat Bill Clinton occupied the White House. 

Clinton launched a National Performance Review, nicknamed REGO, beginning in 1993. During his first term, the effort yielded a 180,000 reduction in federal government employees through buyouts and staff eliminations.  The push saved $136 billion and shrunk government to its smallest size in 30 years.

This Democrat led effort, supported by Republicans, closed superfluous government offices, cut 16,0000 pages of regulations, passed a major procurement reform bill and introduced the electronic filing of taxes, saving millions of dollars. The endeavor helped balance the federal budget. 

Trump's effort will fail unless there is the same bipartisan offensive. However, little progress will be made if lawmakers refuse to touch so-called mandatory spending, which includes Social Security, Medicare, Medicaid, food stamps, unemployment compensation and other safety-net programs.

These programs comprise about 66% percent of the federal budget and run on automatic pilot.  Each fiscal year the costs escalate as more people are added to the rolls of these programs.  Elected officials fear reprisal from voters if they even hint at addressing these programs.

There can be no significant reduction in spending without snipping at these entitlement programs. 

As just one example, the welfare roles have not shrunk one iota despite the jobless rate falling from 6.3% at the start of the Biden presidency to 4.1%.  Some 84.6 million individuals are enrolled in Medicaid, about the same as 2020. Another 42.6 million Americans receive food stamps, same as 2021.

More Americans are working yet social programs haven't seen a decline. The explanation is that the Biden Administration allowed Democratic states, such as California, to ease eligibility requirements for Medicaid funds to pay for other social spending, such as homeless housing.  

Biden bureaucrats also boosted food stamp allotments and waived work requirements for able-bodied adults.  The Wall Street Journal calculated that by simply returning to pre-pandemic Medicaid spending levels (adjusted for inflation) it would generate more than $1.4 trillion in savings over a decade.

The Congressional Budget Office (CBO) provided a range of options in December for carving addressing the federal budget, including changing cost-sharing rules for Medicare, reducing Medicare's coverage of bad debt and instituting new work rules for Social Security disability applicants.

There are a plethora of ways to place the federal budget on a diet, if Congress will act with courage.  For example, ending corporate welfare would save hundreds of billions of dollars that lawmakers regularly use to curry favor with big donors, lobbyists and industry special interest groups.

A 2022 bill known as the CHIPS and Science Act earmarked $53 billion for the country's semiconductor manufacturing industry.  One of the chief beneficiaries was Intel, which raked in $7.865 billion in taxpayer funds.  The money was supposed to create tens of thousands of jobs.

How well did that work out?  Intel announced recently it would layoff 15,000 employees, about 15% of its workforce.  A series of manufacturing missteps, the AI boom and a weak sales outlook was blamed for the layoffs.  Government has a checkered track record of funding private sector ventures. 

The so-called green energy bill, ballyhooed by the Biden Administration, shelled out $391 billion to invest in a variety of private businesses engaged in the manufacturing of solar panels and wind turbine components. Like most corporate largess, there is no accountability for results.

Another windfall for the green energy industry is tax subsidies.  The original price tag for this corporate welfare was $271 billion over 10 years.  The Biden Administration's last estimate projected a 170% jump in costs for the industry gift which was included in the laughably named Inflation Reduction Act. 

Unless Congress reins in spending, the United States is hurtling towards the debt cliff.  Mushrooming deficits and debt are unsustainable, approaching levels of third-world countries. Taxpayers should hold their elected representatives accountable for stopping the budget madness.   

34 Trillion Reasons To Cut Federal Spending

Every hour the U.S. debt jumps $218 million. That's $5.2 billion each day.  Current total government debt stands at a staggering $34.228 trillion. As scary as those figures are, the debt is expected to skyrocket to $50 trillion by 2033, less than a decade away.

For perspective, the nation's debt was $5.67 trillion at the beginning of 2000.  In just over two decades, the current debt is nearly seven times higher.  Since 2018, Congress has shoveled on another $12.7 trillion to the debt mountain. 

Today there is no limit on how high the federal debt can rise.  Congress passed a bill in June of last year suspending the nation's debt limit through January 1, 2025.  It is the equivalent of handing a credit card for Congress to continue to rack up more debt without any restraints.   

The debt balloon is the result of Congress's insatiable appetite for spending more than the tax dollars the government collects. In the most recent fiscal year 2023, the federal government collected $4.44 trillion in taxes, but spent $6.13 trillion, creating a $1.7 trillion deficit hole. 

Deficits matter because the feds issue debt to fund the yawning canyon between revenues and spending.  Beginning with fiscal year 2020 through 2023, the government accumulated deficits totaling $9 trillion. Even drunken sailors are spendthrifts by comparison.   

Don't expect a baptism of fiscal responsibility to convert the current Congress. The Congressional Budget Office (CBO) forecasts a $1.6 trillion deficit by the end of fiscal year 2024 on September 30. Deficits are expected to top $2 trillion annually after 2031, reaching $2.6 trillion in 2034.

Revenues are not the problem.  Tax collections and fees rose 8% from 2022 to 2023.  Individual taxpayers forked over $2.18 trillion, accounting for 49% of the revenue collected by the feds. Fiscal accountability is a fleeting idea that has been drowned by a gusher of spending.

Paying for the debt created by deficit spending is getting more expensive.  Interest costs have nearly doubled the past three years from $345 billion in 2020 to $659 billion in 2023.  Interest is now the fourth largest spending category, behind only Social Security, Medicare and defense.

Those eye watering figures are projected to get worse.  Based on trends, the CBO forecasts that interest on federal debt will reach $1.4 trillion in fiscal year 2033, creating a budget nightmare.  This is fiscally unsustainable without Draconian tax increases or budget cuts or both.   

Balancing the budget, a feat performed by millions of American households, is apparently beyond the mental acuity of Congress.  Only twice in the last half-century has Congress found the political will to reach financial equilibrium--in 1969 and from 1998-2001 under President Bill Clinton,

Before even tackling a balanced budget, Congress must first reign in deficits.  Although it's easy to blame COVID spending for the spike in the size of deficits, Congress has been spending more than government revenues for the last 22 years.  Lawmakers have a spending dependency. 

Since 1997, senators and representatives of both parties have ignored the regular budget process of approving a budget that fully funds the government.  Congress seems to prefer chaos, failing to pass more than five of its 12 regular appropriation bills by the deadline in the last 26 years. 

In 11 of the past 13 fiscal years, lawmakers have not passed a single spending bill by October 1, which marks the beginning of a new federal budget year.  Instead, Congress employs a shell game, approving what's called continuing resolutions to partially fund the government over several months. 

Continuing resolutions maintain government funding at current levels, but often supplemental appropriations are shoehorned into a CR.  These stopgap gimmicks allow lawmakers to spend while obfuscating the full impact on deficits. This lack of transparency would not be tolerated in any business.

For all the brouhaha over CR's, these appropriation measures only cover discretionary spending. The hefty money is federal outlays for Social Security, Medicare, Medicaid, unemployment compensation and other entitlement programs. Funding is mandated by statues.  

These programs accounted for $4.6 trillion in spending in 2023, about 73% of the federal budget. Unless Congress tackles mandatory appropriations, spending will reach the stratosphere.  Lawmakers of both parties are deathly afraid of the political blowback of even suggesting a reduction in programs. 

Representatives and Senators are easily spooked.  Mention "government shutdown," defaulting on the national debt," or "reducing food stamps" and lawmakers capitulate. They prefer political theatre and gamesmanship to tackling the unpalatable but essential choices to restore fiscal integrity. 

What will it take to restore financial sanity?  Most likely an economic meltdown.  Short of a financial Armageddon, the solution is for voters to quit electing the same people to Congress and expecting a different outcome.  If voters make balancing the budget their top priority, there is hope for change. 

Bogus Budget Cuts Insult Taxpayers

Imagine taxpayers' chagrin when they learned this week that $38 billion isn't what it used to be. It could happen only in Washington, where the President and both parties have tried to hoodwink Americans with a bogus budget agreement that offers little hope the country's deficit problem will ever be addressed responsibly.

While the Beltway in-crowd jockeyed to claim credit for reducing the 2011 budget by "historic" levels, it was left to the Congressional Budget Office to expose the shabby charade. It turns out the spending cuts were not as advertised.

After examining the proposed budget deal, the CBO determined that the planned reductions will only trim federal outlays by $352 million below 2010 spending. The nonpartisan budget agency's findings sent Washington politicians scrambling for cover.

Try as they might, the Capitol spin machine could not explain how $38 billion overnight became $352 million. According to the CBO, the plan used accounting gimmicks, cuts to reserve funds and counted funding that was not going to be spent in the current budget.

Under the agreement, the actual reductions are one-hundredth of what Republicans and Democrats trumpeted publicly when the deal was reached. This sham was foisted on the American public by a media that rushed to laud the downsizing before checking the facts.

Now that the truth has surfaced entrenched Washington politicos are still trying to sell the idea that this is a good deal for taxpayers. Their collective arrogance is an insult to every American of all political stripes.

Meanwhile, the federal deficit continues to march skyward. In just the first six months of the current fiscal year, the budget deficit zoomed up 15.7 percent. That staggering increase added another $829 billion to government debt.

At the current spending pace, the federal budget will bleed $1.4 trillion in red ink for the year. As a consequence, government debt will soon bump up against the $14.2 trillion debt ceiling. Raising the debt limit will require Congressional approval.

The media is salivating over another high stakes political battle like the one that just resulted in the budget trimming fiasco. Mainstream news outlets snookered Americans with coverage of the impending doom of a government shutdown. It spooked Republicans who caved as the clock ticked down.

Now President Obama is already daring Republicans to play "chicken" with the debt ceiling. When Obama was a senator, he voted against raising the debt limit, scolding then President Bush for his lack of leadership on deficit reduction. By the president's own definition, apparently the nation still has a leadership problem.

The president and his legions of foot soliders are warning that refusal to increase the debt ceiling will lead to financial Armageddon. Watch as the media takes up the chant. For their part, Republicans are talking bravely, but their leadership will crumble when the media heat reaches the boiling point.

Where does that leave ordinary citizens? Unfortunately, the less than 50 percent of Americans who actually pay taxes in the country are on the hook to pick up the tab for Washington's refusal to enact meaningful budget reform.

It is a sorry state of affairs. The government will continue to grow. Budgets will get fatter. Washington will borrow more money. The country will sink deeper into debt and prospects for economic growth will dim.

Our political leaders should be ashamed. Instead they want us to believe they are now really getting serious about shaving the deficit. Based on the budget deal, nothing could be further from the truth.