The new budget is akin to a family making their financial planning assuming each member will just keep getting raises at their jobs. Forget about being frugal or putting anything away for a rainy day.
Donald Trump’s proposed budget for the 2018 fiscal year is out. Since its release on May 23rd, it has been under fire from both the left and the right. Generically the budget making process starts when the President submits a budget to Congress. Then legislators either take up the challenge to discard the budget, modify the budget, or simply pass short term continuing resolutions. The process isn’t like that of a larger corporation’s budgeting or even remotely similar to the planning process for any entity which seeks a responsible resource allocation model.
Commentary on the left regarding the proposed 2018 fiscal year budget is predictably shrill. Progressives generally discount the legitimacy of the wildly progressive policy of paid parental leave as inadequate, while simultaneously claiming that the President is intentionally sticking the poor with massive welfare program cuts.
Commentary from the right is generally positively spun. Donald Trump’s supporters present an image that his budget will create an economic boom not seen since the days of The Gipper. The right is even willing to accept that only 60 miles of new wall on the US/Mexico border is allocated a total of $1.6 billion in the budget.
It seems that nobody on the left or the right is terribly concerned with the reality that the new budget does not reduce the national debt.
Partisan commentary is inherently biased so it is best to go to the source to find out what the budget actually contains. The Trump proposal is 46 pages of content and is approximately twelve times larger than the four page tax plan the administration produced. Health care, tax, immigration, spending, regulations, energy, welfare, and education reforms are explicitly listed as areas of concern which the Administration is attempting to address within this financial plan.
The only hard figures provided in the opening address to Congress are the total budgeted figure and increase in the military spending listed at $639 billion for the Department of Defense total which represents an increase of $52 billion over the 2017 fiscal year.
Any budget is useless without understanding the assumptions used to determine financial projections in the short and long term. The Trump administration uses a very optimistic set of economic predictions over the long term in the plan. Buried deep in the document near the index listing numerous bureaucrats needed to compile the budget is the table of economic assumptions.
Economics is an art and a science which uses modeling with a smidgen of philosophy to create a reasonable understanding of what composes the engine of an economy. According to the budget proposal the Gross Domestic Product (GDP) will grow by approximately 1/3 over the next ten years while Americans will enjoy a nearly unparalleled period of full employment during that term. Presented in the main summary table we learn that the national debt will increase at the same rate as (GDP) within this framework.
To put this into perspective, these budget proposals are akin to a family is sitting down at the kitchen table and saying let’s spend our money like there’s no tomorrow because there is no doubt that we will keep our jobs. In fact, we will make our family’s spending decisions assuming that we will all get raises. This family then borrows 100% of the increased pay it hopes to make. This type of wishful thinking about the financial situation of our nation produced the previously mentioned $20 trillion national debt.
The silver lining of Trump’s first budget is changing the blind spending on traditional public education. Donald Trump for all of his flaws actually wants to reform the American education system.
It may be that Vice President Mike Pence put the bug into Trump’s ear. While he was Governor of Indiana, Pence oversaw some of the most impressive school choice laws in the nation. The Trump budget downsizes the US Department of Education by about $10 billion or 13% and provides about $400 million to school choice and charter school initiatives.
While this change may seem like a small change in trajectory it cannot be understated that once parents realize the benefits of school choice there will likely be a groundswell of support for this educational structure. The prospect of providing for your own children is a powerful source of motivation. Even minor budgetary movements in this direction may result in a cascading impact in some areas of the nation still grappling with implementation of school choice and charter school programs.
The budget as it is laid out before Congress will not pass in its current form. Even if Trump’s tax plan were a vision of perfection, it wouldn’t see a Rose Garden signing ceremony. History both current and more distant has proven that when legislators have an opportunity to place their sticky fingers on any spending measure, the costs increase as lawmakers bring home some bacon home for constituents.
Anson Knowles is the host of the Alabama-based radio program The Anson Knowles Show Live, Local, Liberty Oriented Talk on 92.5FM/770AM WVNN and wvnn.com.