Judd Gregg: Obituary for the budget

President TrumpDonald John TrumpTrump faces high stakes in meeting with Erdoğan amid impeachment drama Democrats worry they don't have right candidate to beat Trump Trump threatening to fire Mulvaney: report MORE is about to present his third budget.

The first two were dead on arrival.

They were simply ignored by what was then a Republican Congress.

This was ironic since the administration and the Congress, being of the same party, should theoretically have been on the same page.

ADVERTISEMENT

The actual spending decisions were driven by a late agreement that raised the budget caps that had previously restrained discretionary spending.

The result was a huge (or in Trumpian language, “yooge”) increase in discretionary spending.

The 2018 debacle increased discretionary spending by 16 percent over the previous year.

This was during a period where there was essentially no inflation, so the increase was real.

The agreement — not really a budget in any normal sense of the word — added approximately $420 billion of new spending and debt over a two-year period.

Now we are about to be given the first glimmer of what Trump intends to present for this year’s budget, by the acting head of the Office of Management and Budget, Russell Vought.

The proposal will further increase defense spending using a variety of discredited budget gimmicks, while allegedly lowering non-defense discretionary spending to the pre-2018 cap levels.

There is no suggestion that the 60 percent of federal spending known as entitlements will be addressed at all.

This, of course, has been the path of this administration throughout — including during its first two years, when Republicans controlled both chambers of Congress.

They ignore the elephant in the room driving federal deficits and blithely add debt and discretionary spending, especially in the area of defense.

One wonders if Mr. Vought’s prior work experience was at a funeral home.

To call what he has outlined a “dead on arrival budget” would be extremely kind. It is a “dead before departure budget.”

The absurdity of this proposal is only exceeded by its irrelevance.

Now that the House is controlled by the Democrats, any budget agreement will include larger increases in discretionary spending than even during these profligate past two years.

In order to avoid a government shutdown as the debt ceiling comes into focus this fall, there will likely be some sort of agreement creating a new set of caps.

These new caps will use as their baseline the 2018 agreement and then “plus-up” that agreement to get the defense spending the president wants and the discretionary spending the Democrats will demand.

Just using a new set of caps based off the 2018 agreement — without factoring in the inevitable plus-ups — will add approximately $2 trillion to the debt over ten years.

This is real debt that must be paid back.

However, there are many on the Democratic side and some in the White House who seem to view adding new debt at an unsustainable rate as the “new normal” — and as perfectly acceptable economics.

It would be refreshing if the scenario were different.

It would be a great relief for the nation if the president and Congress were on a course to control the rising debt that will soon amount to almost 100 percent of GDP.

ADVERTISEMENT

But a Democratic House that is now in the arms of its socialist movement will not address the debt in any way, with the exception of calling for massive tax increases.

The president has shown no real interest in addressing the underlining causes of the deficit either. Debt-financing has been at the core of his private business career.

It appears that it would take a deus ex machina moment to change this course.

Such an out of body event may actually be on the horizon, however.

It involves having the Congress do nothing, which is something it appears to do well.

If there is no action taken to change the caps that control discretionary spending, then the caps will revert to the prior-year limits when the 2018 agreement expires. This will force a cut in discretionary spending of approximately $130 billion in 2020 and will reinstate the sequester — the most feared of all fiscal alternatives in the minds of our politicians.

Political pain of this type might be enough to force thoughtful action, not only on discretionary spending but also on entitlement reform.

This will be a period when fiscal conservatives — assuming there are any left in the House, Senate or White House — have real leverage.

Responsible fiscal action can be taken without the need to go through this charade of budgeting that the White House is about to kick off.

It can be accomplished by a White House that has an awakening on the threat of trillion-dollar deficits.

But it will also need members of Congress, especially in the Senate, to stand up and say, “Enough spending is enough."

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.