President TrumpDonald TrumpTrump takes shot at new GOP candidate in Ohio over Cleveland nickname GOP political operatives indicted over illegal campaign contribution from Russian national in 2016 On The Money — Dems dare GOP to vote for shutdown, default MORE released his third White House budget proposal today, and kudos to his acting budget director Russ Vought for crafting a plan that promotes fiscal restraint. Under this budget request, hundreds of wasteful programs will be eliminated and every domestic agency will be required to make a 5 percent cutback in spending. This budget blueprint includes $2.7 trillion in government spending cuts over the next decade.
Vought has told me, “No other administration has proposed this level of spending reductions.” Not even Ronald Reagan. The problem is Trump is already facing a stone wall of resistance to his budget priorities. Even before the budget was officially released, Democratic Representative John YarmuthJohn Allen YarmuthDemocrats face full legislative plate and rising tensions The Hill's Morning Report - Presented by Alibaba - Democrats return to disappointment on immigration Yarmuth and Clyburn suggest .5T package may be slimmed MORE, chairman of the House Budget Committee, said over the weekend that the Trump budget plan has “no chance in the House.” Why? He claimed that the budget contains “severe cuts in essential programs.”
Here we go again. This is exactly what Reagan faced in the 1980s when then Democratic House Speaker Tip O’Neill declared his conservative budgets “dead on arrival.” The Democrats repelled most of the spending cuts that Gipper proposed, and then blamed him for the deficit spending. Congress ended up outspending the Reagan budget requests every year.
For Trump to make progress on trimming deficit spending as this latest plan foresees, the president needs two things to happen. Trump needs continued solid growth of 3 percent or more as we had in 2018. Growth is everything when it comes to bringing revenues up and deficits down. Even with the tax cuts, federal revenues in 2018 came in matching the highest year for tax collections in our history. Vought is right when he concluded, “We don’t have a revenue problem. It’s a spending problem.”
Trump will have to enforce this latest budget with steely resolve. So far he has used the veto pen sparingly. Now he must recognize that it is his best weapon to prevent a dangerous fiscal situation. His first two budgets were almost completely ignored by a Republican Congress. (Excessive pork spending is a bipartisan problem on Capitol Hill.) House Republicans, outside the Freedom Caucus, showed no interest in curbing spending.
But now Trump faces House Speaker Nancy PelosiNancy PelosiPelosi says House members would not vote on spending bill topline higher than Senate's McConnell privately urged GOP senators to oppose debt ceiling hike On The Money — Dems dare GOP to vote for shutdown, default MORE, whose Democratic caucus wants free everything. House Financial Services Chairwoman Maxine WatersMaxine Moore WatersAdvocates call on top Democrats for 0B in housing investments Cori Bush hits her stride by drawing on activist past Cawthorn to introduce resolution condemning political violence after warning of 'bloodshed' if elections are 'rigged' MORE said this weekend that she is committed to increasing the budget on social programs and reversing the few cuts that Trump has already made. The only idea for paying for the Green New Deal, Medicare for All, $15 minimum wage, Social Security benefit hikes, free college tuition, and the like are by repealing the Republican tax cuts. First, that is not going to happen. Second, this would only pay for a sliver of the cost.
The most powerful tool Trump has over legislation is the veto. He needs to use it often in the months ahead for his agenda. Trump should declare that if spending bills come in even a dime over his new budget totals, he will veto each and every one. The budget crafted by Vought is a powerful fiscal marker that must be enforced. This is his best tool for controlling federal spending, and presidents have historically used it to great effect.
Powerful presidents have used the veto power to assert their control over Congress. Abraham Lincoln and Franklin Roosevelt used it routinely to repel overspending. Grover Cleveland, an underrated president, vetoed more than 1,000 special interest spending bills. Reagan was reluctant to veto in his first term, and preferred to play nice with Congress. Once he finally realized that did not work with Democrats, he started vetoing regularly, which helped cut the deficit as a share of gross domestic product in half. The veto power is a sign of strength and confidence.
Trump can also gain credibility with voters on the deficit by vetoing early and often under the Pelosi reign of power. The Democrats cannot at once attack Trump for vetoing obese spending bills, and then hypocritically blame soaring deficits on him. The veto will allow Trump to define for voters the extent of the coming Pelosi spree. If he does not do this, his sensible federal budget plan will not be taken seriously. It will be wheeled off to the intensive care unit. House Democrats and Senate Republicans will serve a banquet of spending all paid for with debt and tax increases.
The president has unveiled a first class budget for our government. It is fiscally conservative and supports more economic growth, while wisely prioritizing spending on the most critical problems of national security, border control, opioid epidemic, and infrastructure modernization. Now Trump can enforce it with his veto pen. That is the art of the budget deal.
Stephen Moore is a distinguished visiting fellow at the Heritage Foundation and an economic consultant with FreedomWorks. He served as an adviser to the 2016 Donald Trump campaign. His latest book out with Arthur Laffer is “Trumponomics: Inside the America First Plan to Revive Our Economy.”