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President-elect Donald Trump’s designated debt-busters, Elon Musk and Vivek Ramaswamy, last week wrote an op-ed in the Wall Street Journal providing the fullest accounting yet of their plans to cut “waste, fraud and abuse” — that most well-worn and oft-broken of political promises.
Indeed, an omission from the dynamic duo’s piece suggests that they — and Trump — may have already trimmed their ambitions: Musk and Ramaswamy made no mention of Musk’s previous boasts that he’d slash “at least” $2 trillion in a single year from the federal budget.
It’s a wonder that the aspiring oligarch and “super genius,” as Trump calls him, made the claim in the first place, including at Trump’s preelection rally at Madison Square Garden. Perhaps he’s finally been schooled on the realities of fiscal policy.
Yet neither did Musk and Ramaswamy disavow the $2 trillion promise. So it’s worth examining just why the goal is a mission impossible, and why the actions they say Trump will take are unlikely to significantly reduce federal debt. In fact, if we subtract Trump’s promised tax cuts from the projected revenue, annual deficits and the debt could well increase — just as they did during his first term, when his actions caused the national debt to balloon by $8.4 trillion over a decade.
A little fiscal math: The federal budget for the fiscal year that began Oct. 1 is $6.8 trillion. Musk proposed to cut 30 percent of that. Which would be hard enough if the whole amount were on the chopping block. But roughly three-quarters of the $6.8 trillion is either politically untouchable (especially Medicare and Social Security, which Trump has vowed to leave unscathed) or legally off-limits (interest on the debt).
That leaves just over a quarter of federal spending: $1.9 trillion in so-called “discretionary spending” that Congress controls annually through its budget process. But discretionary programs account for just about everything that the government does and that Americans expect it to do — including domestic spending and funding the military.
A few examples: air traffic control, agriculture programs, disaster aid, education, courts, highways and other infrastructure, immigration, homeland security, law enforcement, national parks, the Pentagon and scientific research. (For those America First-ers who like to trash foreign aid: It’s less than 1 percent of spending.)
In short, Musk’s aim to cut $2 trillion would require wiping out not just supposed waste, fraud and abuse but also all discretionary spending — even though Trump has said he wants to increase the defense portion.
Skeptics be damned, Musk and Ramaswamy say.
They’ll “cut the federal government down to size.” What size, you ask? They don’t say. For a half-century, no matter which party held power, annual federal spending has been about 21 percent of the nation’s gross domestic product. And tax revenue has been roughly 17 percent of GDP. Hence yearly deficits and a growing debt.
Musk and Ramaswamy didn’t identify specifically what they’d cut, aside from three perennial conservative targets — Planned Parenthood, public broadcasting and foreign aid — that together add up to $2.3 billion, hardly even a rounding error relative to annual deficits. They broadly take aim at more than $500 billion in annual spending for programs that Congress hasn’t reauthorized formally. Don’t hold your breath for those cuts.
Musk and Ramaswamy wrote more in their op-ed about cutting federal regulations than cutting spending. Repealing rules would allow for cost-saving “mass” firings in the government bureaucracy, they argued. But conservative economist Brian Riedl, a fellow at the Manhattan Institute, calculated that even large workforce reductions wouldn’t meaningfully pare the budget. And, he said, the government would likely end up hiring private contractors for some functions.
In sum, as we say in math exercises, Trump’s numbers won’t add up to reduced deficits and smaller government. Again.
