CHRIS EDWARDS, CATO INSTITUTE
President-elect Donald Trump said on the campaign trail that he will balance the federal budget and cut wasteful spending. Here are some of Trump’s views on budget reforms:
- “We are going to ask every department head in government to provide a list of wasteful spending projects that we can eliminate in my first 100 days.” Source.
- “We can also stop funding programs that are not authorized in law. Congress spent $320 billion last year on 256 expired laws … Removing just 5 percent of that will reduce spending by almost $200 billion over a ten-year period.” Source.
- “I may cut Department of Education. I believe Common Core is a very bad thing,” Trump said. “I believe that we should be — you know, educating our children from Iowa, from New Hampshire, from South Carolina, from California, from New York. I think that it should be local education.” Source.
- “If we save just one penny of each federal dollar spent on non-defense, and non-entitlement programs, we can save almost $1 trillion over the next decade.” Source.
- “We’re going local. Have to go local. Environmental protection—we waste all of this money. We’re going to bring that back to the states … We are going to cut many of the agencies, we will balance our budget, and we will be dynamic again.” Source.
- “Waste, fraud and abuse all over the place. Waste, fraud and abuse. You look at what’s happening with Social Security, you look—look at what’s happening with every agency—waste, fraud and abuse. We will cut so much, your head will spin.” Source.
I hope my head does spin from cuts, although most of Trump’s proposals are vague and quite timid. Still, I’m hoping that the more the incoming president finds out about the federal budget, the more he will appreciate the need for major terminations.
So let me suggest some wasteful spending that the new administration should tackle, and the annual savings from terminating each:
- K-12 school subsidies, which generate bureaucracy and stifle innovation ($25 billion).
- Farm subsidies, which enrich wealthy landowners and harm the environment ($25 billion).
- Rural corporate welfare, which is handed out by the Department of Agriculture ($6 billion).
- Energy subsidies, which have been one boondoggle after another ($5 billion).
- TSA airport screening, which Trump has said is “a total disaster” ($5 billion).
- The war on drugs, which wastes police resources and generates violence ($15 billion).
- Excess pay for federal workers, especially gold-plated retirement benefits ($33 billion with a 10 percent cut).
- Housing subsidies, which distort markets and damage cities ($37 billion).
- Community development aid, which is corporate welfare used for buying votes ($11 billion).
- Urban transit and passenger rail funding, which are properly local and private activities ($12 billion).
- Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law ($225 billion a year by 2026).
President Trump will face major budget pressures in coming years as deficits and entitlement spending soar. Today’s $600 billion deficits are headed toward $1 trillion, and deficits will be even higher if a recession comes along.
Federal spending cuts would help avert a fiscal crisis and boost growth by reducing economic distortions. The incoming Trump team should start with some of the cuts here, and there are plenty more proposals at DownsizingGovernment.org.
Chris Edwards is the director of tax policy studies at the CATO Institute and editor of www.DownsizingGovernment.org. He is a top expert on federal and state tax and budget issues. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.