The Corner

Economy & Business

Donald Trump’s Weak Policy Proposals

I thought that Thursday’s debate was pretty awful to watch. But I guess, considering the circumstances, Senators Rubio and Cruz did well. But there were many moments where I was wondering what I was doing watching that mud fight. (Even though I will admit that both Donald Trump and Senator Rubio made me laugh.)

Unfortunately, once again there was barely any mention of entitlement programs. Thanks to Rubio, the issue of our debt was mentioned:

In less than five years, 83 percent of our entire budget will be made up of Social Security, Medicare, Medicaid, and the interest on the debt.

That means only 17 percent of our budget will be for things like the military or the Department of Education or environmental protection issues.

You cannot balance our budget unless you deal with that 83 percent, which is why I’ve been repeatedly talking about since my time running for the Senate in Florida, where there are a lot of people like my mother that depend on Social Security and Medicare, on the need to save those programs, by reforming the way they work for future generations.

And I think if we — the longer we take to do this, the closer we are going to get to a debt crisis. And, Wolf, you did not get an answer to your question. This debt issue is — the next president of the United States will not be able to serve four to eight years without dealing with the national debt.

At some point in the future, I will try to get back to what I think of this idea that we “need to save those programs … for future generations.” Rubio added this:

It is not a question of if, it is a question of when we have a debt crisis. And we should not leave the stage here tonight without hearing a serious answer from every single one of us about how we are going to deal bring the national debt under control once and for all.

That didn’t happen but good for Rubio for not being afraid to get asked the question. I would have liked to hear his answer.

Now, let me move on to Donald Trump’s two policy proposals from the debate. First, the only heath-care reform idea he went on and on about last night is the need to get rid of the “lines around the states.”

We should have gotten rid of the lines around each state so we can have real competition. …

But, we should have gotten rid of the borders, we should have gotten rid of the lines around the state so there’s great competition. The insurance companies are making a fortune on every single thing they do.

Sounds great, right? Get rid of the lines, force competition between insurance companies — and people will have more choices and the prices will go down. Unfortunately, this policy proposal won’t achieve as much as as Trump thinks, at least not on its own and not overnight. Dean Clancy had a good post over at the Federalist a few years ago on this issue.

There is no doubt that more competition within intrastate health-insurance markets would be a good thing since in many states one or two big insurance companies control the entire market. Also most states have over-regulated their health-insurance market and competition would force reforms. Of course, some federal reforms would be necessary too. However, there are also many reasons why this is not the be-all-and-end-all of health-policy reform that many would like it to be — as health-care wonk Bob Laszewsk of the Health Care Policy and Marketplace Review explains in this post.

The second policy suggestion we got from Trump was about what he would cut in the budget to address the $10 trillion in lost revenue generated by his tax plan. He did note that his plan would create so much economic growth that “[the economy] will be great. We will have a dynamic economy again.”

Here is the exchange about the cuts:

We’re going to make many cuts in business.

I am hoping he means that he wants to get rid of all subsidies and government-granted privileges to private companies. He added:

We’re getting rid of — we’re going to get rid of so many different things. Department of Education — Common Core is out. 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. And we’re going to have other (inaudible) many things.

We are going to cut many of the agencies, we will balance our budget, and we will be dynamic again.

But check out Trump’s response when Wolf Blitzer pushed him on his proposal:

BLITZER: Mr. Trump — Mr. Trump. If you eliminate completely the Department of Education, as you have proposed, that’s about $68 billion. If you eliminate the Environmental Protection Agency, that’s about $8 billion. That’s about $76 billion for those two agencies.

The current deficit this year is $544 billion. Where are you going to come up with the money?

TRUMP: 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.

I agree that there is a lot of waste in the federal government. Medicare and Medicaid’s improper payments are huge, and so are problems with Social Security and the Earned Income Tax Credit. Improper payments alone cost over $100 billion each year. If you add in all the spending to study a dozen monkeys running in hamster balls on a treadmill and other crazy programs like that, you add a few millions to the billions of dollars. But that’s not anywhere near enough.

Now imagine that what he calls “fraud, waste, and abuse” is getting rid of most non-defense discretionary spending. Without the Trump tax cuts and according to the budget, by 2026, non-defense discretionary spending will be $738 billion while the deficit will be $793 billion. You would be left with a small deficit. Now, if you add the tax cuts, even with some crazy economic dynamism going on, you would still be seriously in the red, I suspect. Cutting a lot of that spending would create more economic growth but I am afraid that it would still not be enough.

The truth is that unless what he meant by “fraud, waste, and abuse” is that entitlement programs will be dramatically reformed, getting rid of fraud, waste, and abuse won’t be enough.

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