President Trump 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 Yarmuth, 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.