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Pres­ident Donald Trump pro­posed his budget for the 2021 fiscal year last week. I Wiki­media Commons

Pres­ident Donald Trump pro­posed his budget for the 2021 fiscal year last week. It has been received with a chorus of boos from the pro­gressive left for its spending cuts, domestic pro­grams, and pro­posed funding of the border wall. 

The Demo­c­ratic Party does not like Trump’s budget. They should not be alone, however, in their dis­ap­pointment with the pro­posal. Repub­licans and con­ser­v­a­tives must also appraise the Trump budget for what it is: a mixed bag at best, and a massive dis­ap­pointment at worst. 

Politi­cians talk about bal­ancing the budget the same way stu­dents discuss homework on a Friday night. They’ll get it done quickly, so they can go out for a drink later. 

The United States has run a budget deficit that has racked up more than $22 trillion in debt, thanks in large part to the unwill­ingness of bureau­crats to address enti­tlement spending. In 2017, 24% of the federal budget was devoted to Social Security with $945 billion shelled out to senior cit­izens. In the same budget, nearly $600 trillion was allo­cated for Medicare. Econ­o­mists forecast that the cost of both pro­grams will only escalate further as more of the baby-boom gen­er­ation enter retirement. 

It is both inex­cusable and a national embar­rassment that our public ser­vants have refused to keep the costs of both pro­grams in check, and thereby passing on an enormous I.O.U. to the next gen­er­ation of Amer­icans.  

When Trump announced his pres­i­dential bid in 2016, many won­dered if he could finally change the culture of waste in Wash­ington, D.C. There was hope he would seri­ously tackle our nation’s budget problem. At his cam­paign announcement in 2015, Trump pledged not only to reduce the deficit, but actually begin paying down the national debt. In December of that year, Trump boldly pro­posed a “budget freeze” to halt the growth of all dis­cre­tionary expen­di­tures. It appeared that maybe Trump would be the one to finally break through and restore sanity to America’s finances. 

And then Trump got to talking about enti­tlement reform.

“I’m not going to cut Social Security like every other Repub­lican, and I’m not going to cut Medicare or Med­icaid,” Trump swore in the pri­maries, effec­tively derailing any hope of a fis­cally respon­sible admin­is­tration. 

Since Trump took office, the annual deficit has increased from $665 billion in 2017 to $1.1 trillion this year. Dra­matic increases in defense spending and the 2017 tax bill added to the growing cost of enti­tlement pro­grams. The national debt has increased by nearly $4 trillion in Trump’s first term alone. For per­spective, the pre­vious Repub­lican pres­ident George W. Bush needed eight years with two wars and an eco­nomic col­lapse to rack up the same amount of debt. 

Many in the Trump White House have argued the increase in the deficit was an unfor­tunate side effect of the needed tax relief to grow our economy. To his credit, Donald Trump has enjoyed the best economy in a quarter-century for his entire first term. Wages are growing across all demo­graphics, unem­ployment is at an all-time low, and work­force par­tic­i­pation is on the rise. The Trump economy is booming. And his tax reform bill deserves some credit. 

But now that we are more than two years removed from the passage of the tax cuts and the economy is in great shape, it is time for Trump to get serious about the deficit.

Indeed, never has there been a better time than now for Wash­ington D.C. to finally tackle enti­tlement reform and overhaul Social Security and Medicare. For the first time in a gen­er­ation, our employment numbers and GDP growth are strong enough that steep cuts to federal spending would not risk a recession. 

In the 1990s, the United States enjoyed a similar eco­nomic boom with the rapid growth of tech­nology in the work­place. The explosion, caused by the rise of the internet, led to a pro­longed era of peacetime growth. In the midst of this, Wash­ington  addressed the budget deficit. Pres­ident Bill Clinton kicked off his second term by signing into law the bipar­tisan Bal­anced Budget Act of 1997 that set America on course to running a surplus within the next five years. Both parties agreed that a booming economy was an ideal time for the United States to make nec­essary spending cuts. 

We again are in the midst of an eco­nomic renais­sance in the United States. Yet even with the most ideal of con­di­tions to make dif­ficult deci­sions, Pres­ident Trump has mostly passed the buck on enti­tlement reform and tackling the deficit. To his credit, he does propose some reforms to Medicare and Med­icaid. The White House budget would tighten eli­gi­bility for Med­icaid and alter pre­scription drug pro­vi­sions in Medicare. However, those savings average out to only about $42.2 billion per year over the next ten years. For per­spective, that will only cut the annual deficit by 3% of its current level. Social Security remains an unad­dressed ticking time bomb whose trust fund is esti­mated to run out by 2034. 

The path towards a bal­anced budget begins with reforming Social Security. To do so, the Trump Admin­is­tration should back three common sense pro­posals. First, raise the retirement age from 65 to 69 by the year 2030. When Social Security was first created in 1935, life expectancy for men was 59 years, and for women it was 63. Today, the average American lives until they’re 78 years old. 

Raising the retirement age would reduce the deficit by $100 billion by the end of the decade. 

Second, Trump must embrace a new cost of living index for cal­cu­lating Social Security ben­efits. Adopting “Chained CPI”, a pro­posal set forward fifteen years ago by econ­o­mists, would save $340 billion by 2030. 

Finally, Trump should propose mean-testing ben­efits for high-income seniors. It makes little sense that a mul­ti­mil­lionaire elderly couple receives the same amount in Social Security ben­efits as a widow in a working class neigh­borhood. These three pro­posals would cumu­la­tively reduce the deficit by over half of a trillion dollars and save Social Security for future gen­er­a­tions; more impor­tantly reining in the long-term growth of non-dis­cre­tionary spending.

If Donald Trump’s desire is to score quick and easy political points with a safe budget, he should stick with his current pro­posal. But if he wishes to leave a legacy of lead­ership and oversee a pres­i­dency that pos­i­tively impacted the lives of the American people, he must address enti­tlement spending. 

 

Matt Fisher is a senior studying political economy.