Politics & Policy

Wishful Thinking, Again

President Trump makes his case to a joint session of Congress, February 28, 2017. (Photo: Jim Lo Scalzo/Pool/Reuters)
Trump offers up gross fiscal irresponsibility.

Populism does not mean putting the American people first. Populism means telling the American people whatever it is they want to hear, even if it is bull and everybody knows it.

The courtiers and scribes spent the evening after President Donald Trump’s big speech to Congress engaged in increasingly absurd metaphysical speculation over the nature of what it means to be “presidential” and the degree to which Trump has achieved this. Never has so much gibberish been uttered by so many over a reflexive adjective.

And there were exclamations of surprise: “He came out against . . . bigotry!” Well, raise my rent. What did you expect him to do, endorse the vandalism of Jewish cemeteries? End Black History Month by saying, “Hey, you know what, Joe Biden was right: We do want to put you back in chains!”

Preposterous nonsense. But that is what we must expect from our increasingly ceremonial presidency. Who applauded? Who didn’t? Who was the first to stop clapping? What does it mean? It is difficult to imagine a self-respecting people’s consenting to be governed by these people, and to be condescended to by their sycophants.

Trump was, as expected, light on policy details. It is hard to blame him.

But I’m up for the challenge.

Nobody wants to be the first to offer any policy specifics, because there are only two kinds of policy specifics: Those that are transparently unserious and those that are unpopular, at least among some constituency. Nobody is volunteering to put the bell on the cat.

But what did Trump offer instead?

One, a promise to significantly reduce taxes.

Two, a promise to significantly increase spending.

Trump wants to increase military spending by $54 billion next year. He has proposed some offsetting cuts — and good for him on that count — focused largely on the State Department and diplomatic programs. These cuts are unlikely to be enacted by Congress and are opposed by many current and former military officials, who view them as a necessary complement to traditional military operations. There is room to cut at State and in USAID, but it is not obvious that a cut of 30 to 40 percent in these programs is in the best interests of the United States right now.

But even if we cut these to nothing, we still wouldn’t save enough to pay for what Trump is proposing in the way of tax cuts and a $1 trillion stimulus bill that nobody is calling a “stimulus” bill. (Republicans have learned to say “infrastructure” with straight faces.) If you think Republicans are going to suddenly get serious about deep and permanent cuts to the federal apparatus, consider that Trump’s new secretary of energy, former Texas governor Rick Perry, famously wanted to shutter the department entirely . . . until about a month ago, at which time he experienced a change of heart.

This is going to be aggravated by Trump’s consistently repeated refusal to do anything about federal spending where the spending actually happens: in the entitlement programs.

If you refuse to touch entitlement spending (Social Security, Medicare, Medicaid, etc.) and are intent on increasing military spending (which, arguendo, may actually need to be done) then you have put about 80 percent of the federal budget beyond the reach of any budget-cutting exercise.

If you refuse to touch entitlement spending and are intent on increasing military spending, then you’ve put about 80 percent of the federal budget beyond the reach of any budget-cutting exercise.

Thanks to congressional Republicans, the deficit is today much smaller than what it was during the reign of the triumvirate of Barack Obama, Harry Reid, and Nancy Pelosi, but we still run a deficit. The Congressional Budget Office projects that under current law — which is to say, even without Trump’s proposed $1 trillion stimulus — federal spending will grow by about 60 percent in the next ten years, driven largely by the parts of the budget that nobody wants to touch: entitlements. Federal spending as a share of GDP is expected to remain higher than its average over the last 50 years. If Republicans should decide to get rid of the unpopular parts of the Affordable Care Act (the taxes and individual mandate) and keep the popular ones (the subsidies), then you can expect that number to get even worse.

And much of this assumes that the interest rates on all that federal debt stay at levels that are by historical standards unusually low. A return to the historical average would mean a Pentagon-sized hole in federal finances, and there is no reason to believe that the average is the top limit. The CBO doesn’t think those rates are going to remain low: It already is projecting that interest payments will double (as a share of GDP) over the next decade.

Beyond this gross fiscal irresponsibility, what did Trump propose? A lot of federal commissions and blue-ribbon task forces writing a lot of reports. That and another expensive new entitlement: paid maternity/paternity leave.

Some Republicans no doubt will insist that the deus ex machina of economic growth will solve this problem. It won’t. Remember that expected future GDP growth already is included in the calculation of those unfunded liabilities (not only for the federal entitlements but also for state-level pensions and other obligations), meaning that growing our way out of that problem would require unexpectedly high economic growth not for a year or two but for many decades. Politicians always promise that they know how to make growth happen, but betting the nation’s future on that prospect would be indefensibly irresponsible.

A much more responsible course would be to take modest steps today to prevent the need for much more radical steps in the future. We cannot do that if we’re taking the great majority of federal spending off the table.

Populism is telling the people what they want to hear. Leadership is telling them what they need to hear.


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