Missing: Budget reform on defense, Medicare and Social Security
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On Tuesday, President Trump unleashed a 62-page budget proposal and, along with it, almost immediate outrage. The document relies on heavy reductions to social safety net programs and implements a “2-Penny Plan,” under which non-defense discretionary spending would be cut by 2 percent each year. Under the plan, federal spending would be $3.6 trillion lower over the next decade.

The budget would make good on Trump’s long-promised plan to hike Pentagon spending, with a year-one increase of about $54 billion offset by roughly the same amount in non-defense discretionary cuts. Overall, the budget would leave the proportion of defense to non-defense discretionary spending higher than it’s been in 40 years.

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For fiscal conservatives weary of an era of “open-ended government,” the prospect of a budget that balances, eliminates 66 programs outright and includes more cuts than any other presidential budget in history is tantalizing. But there are a few major catches even for those inclined to support the types of policy changes that are causing so much grief on the opposite side of the aisle.

 

For one, the budget’s reductions in Medicaid spending, roughly $839 billion, are largely contingent on enactment of the American Health Care Act, which barely passed the House earlier this month. The budget also assumes an aggressive 2.5-3-percent rate of economic growth — more than that projected by the Congressional Budget Office over the same period — and a rate of Pentagon spending growth that is subject to significant variation if priorities change moving forward.

The roughly $54 billion in discretionary spending offsets are based on reductions to programs that include the State Department, the Environmental Protection Agency, the Department of Agriculture, and $192 billion from the Supplemental Nutrition Assistance Program (SNAP). Each of these cuts would be a heavy lift politically, and the budget does not get into full details of where exactly all its savings would come from.

And of course, the presidential budget represents an agenda and a starting point — the real work is now up to Congress, which is likely to reject at least some of the plan.

But a bigger concern for fiscal conservatives is that Trump’s plan specifically excludes the biggest portion of the budget — the entitlement programs of Medicare and Social Security — and the biggest line item of discretionary spending — the Pentagon. It’s no secret that Congress is notoriously hesitant to touch these programs, and a presidential budget that specifically excludes them only cements that expectation.

There is a valid debate to be had about what the proper Pentagon topline should be in order to keep the country safe, but it is inexcusable to refrain entirely from trimming a department recently caught covering up $125 billion in waste it internally identified.

There is also debate to be had over whether “parity” — that is, equal cuts to defense and non-defense spending under the Budget Control Act — makes sense, but that debate should not ignore the real political ramifications of what would effectively decimate any cross-partisan support for maintaining this spending restraint.

Whether one is inclined to believe or be skeptical of the optimistic growth assumptions in the budget, relying so heavily on projections that are, at best, subject to change, is a dangerous game to play with large liabilities already looming.

Ultimately, the president’s budget is neither more surprising nor more binding than it was when the framework was first released in March. Despite the sound and fury from many, fiscal conservatives can find a great deal to celebrate in a budget that takes such a serious look at the fundamental question of the proper size and scope of government.

But a plan that also digs in on one of the biggest problems plaguing Washington — taking the two biggest spending drivers off the table for any reforms — is troubling news for Democrats and Republicans alike, and a flaw Congress should seriously work to address as it develops its own blueprint.

Jonathan Bydlak is the founder and president of the Coalition to Reduce Spending, a non-partisan advocate for lower federal spending and the creator of SpendingTracker.org. He is a fiscal policy expert and also served as director of fundraising on Ron Paul's 2008 presidential campaign. Bydlak holds a degree in economics from Princeton University. Follow him on Twitter @jbydlak and @Reduce_Spending.


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