Friday, May 26, 2017

OUCH! ... Sound Priorities, Unsound Budget

Copies of the Trump administration 2018 federal 
budget on Capitol Hill. (Reuters/Kevin Lamarque)
Inasmuch as it stands approximately zero chance of ever becoming law, President Trump’s budget proposal demands that we enumerate the angels dancing on the head of a pin. But there is good dance criticism and bad dance criticism.
Something to keep in mind when considering such budget proposals is that a handful of programs account for almost the entirety of federal spending: Social Security, Medicare, Medicaid, and other health-care benefits, national defense, and interest on the debt. Social Security and medical benefits together account for more than half of all federal spending, while defense-related spending accounts for another fifth. The “everything else” category — “non-defense discretionary spending” — amounts to just under 20 percent of the budget.
What follows from this is fairly straightforward: If your budget priorities include an increase in defense spending and avoiding cuts to Social Security and Medicare — and these are President Trump’s priorities — then any effort to locate savings in the budget will put tremendous pressure on non-defense discretionary spending. Add in President Trump’s promise to enact “one of the biggest tax cuts in American history” and that pressure gets very intense indeed. Trump’s budget is ill-advised in many of its particulars and incompetent in others, but as a statement of priorities, it is very much what one would expect from a conventional Republican president — perhaps too much so.
Many of the critics have fixed upon the wrong parts of Trump’s proposal: In spite of hyperventilating claims about “slashing” government spending (Reuters) or taking an “ax” to the social safety net (CNN), what’s actually proposed on those fronts is both modest and sensible: a small reduction (amounting to less than 1 percent) in Social Security disability spending and a small reduction in Medicaid spending. We are habitually wary of politicians who promise to balance the budget by eliminating “waste, fraud, and abuse,” in the inevitable formulation, but both the disability program and Medicaid are infamous pits of fraud. The federal government makes about $140 billion in improper payments annually, a shocking number that is driven largely by Medicaid. One in ten Medicaid dollars is improperly spent. There is room for savings there. In fact, those improper payments alone outstrip the $100 billion a year in total safety-net spending reductions the Trump budget proposes.
Read the rest of NR's editorial HERE and follow links to related stories below:

The Return of the Naïve Supply-Sider

5 Big Ways That Trump's Budget Doesn't Add Up budget-proposal-irresponsible-supply-side-dogma

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