Photo: Kevin Dietsch/Getty Images
Donald Trump famously doesn’t care a lot about budget deficits. He presided over a massive increase in the national debt (by $7.8 trillion, according to one nonpartisan estimate) during his first term in office, and in his occasional collisions with Congress over spending measures (most notably the 2018–19 government shutdown, the longest in U.S. history), he was concerned about where appropriations went rather than their magnitude. Trump has also regularly groused about the Federal Reserve Board’s insistence on keeping interest rates relatively high to make monetary policy an effective curb on inflation in the absence of an effective fiscal policy of spending restraint. If there were any residual doubt about the 47th president’s slim-to-nonexistent reputation as a fiscal watch guard, it was probably laid to rest by his shocking demand last month that congressional Republicans back an increase or even a suspension of the national debt limit so he wouldn’t have to worry about it after his return to power. Indeed, it was so shocking that an otherwise submissive GOP wouldn’t go along with it.
So why, you might reasonably ask, are Trump’s hirelings and allies at both ends of Pennsylvania Avenue obsessed right now with devising deep cuts in domestic spending? To be clear, they really are obsessed; as Punchbowl News just reported, House Republican committee chairs trying to put together a budget plan to implement Trump’s agenda are focused on “cuts, cuts, and more cuts,” running into many trillions of dollars. Most of them focus on safety-net programs like Medicaid aimed at helping low-income Americans. Is that really necessary?
Probably so, for the following reasons:
Trump’s second-term agenda is expensive
Trump 2.0 includes two to three new major areas of emphasis that boost budget deficits. The first is extending and expanding the 2017 Trump tax cuts, which mostly expire at the end of this year. Even a simple extension might cost $4 trillion over ten years. The second is massively expanded appropriations for “border security,” especially the pledged mass-deportation program that Trump has already launched (but can’t pay for!); that could run as much as a third of a trillion dollars right away. It’s also very likely that the new administration will want to boost defense spending significantly, if only to back up his saber-rattling toward Mexico, Panama, and even (!) Denmark. Even without a commitment to reducing existing deficits and prior debt, Republicans will need major budget cuts to pay for new revenue losses and spending increases.
Trump has put big parts of the budget off-limits
During the 2024 campaign, as in the past, Trump has placed Social Security and Medicare off-limits to budget cuts, one area in which he has significantly broken with old-school fiscal hawks like former House Speaker Paul Ryan. These two retirement programs together account for 45 percent of federal spending. National defense, another spending category favored by Trump, represents 13 percent of federal spending. So if spending cuts have to be made, that puts quite a bit of pressure on the remaining elements of the budget, mostly low-income entitlements (e.g., Medicaid and CHIP) and the hodgepodge of federal programs subject to annual appropriations (a.k.a. nondefense discretionary spending). The fewer the targets, the bigger the cuts need to be.
Fiscal hawks have a lot of leverage due to small Republican margins in Congress
The same small bloc of House Republicans (centered on the House Freedom Caucus) that had the temerity to derail Trump’s debt-limit increase demand last month are by and large sincere, hard-core, old-fashioned tea-party fiscal austerity fans. Their symbol, and arguably their leader, is veteran Texas congressman Chip Roy, who has already survived a MAGA purge effort and has little or no fear of the White House. It’s very clear his support for Trump’s agenda is contingent on deep domestic spending cuts in areas that are on the table — cuts that House Speaker Mike Johnson was able to avoid in the last Congress because of the power Democrats in the White House and the Senate had to stop them. In his view and that of a significant number of his colleagues, the time for excuses is over, and he’s demanding his pound of flesh, as Politico explains:
Like the movement conservative he is — his bona fides forged in the tea party era — Roy sees the shrinkage of the federal footprint as his political lodestar, and most of his policy views go back to that.
Trump ran on reducing inflation, he notes. And how should he do that? “Cut spending,” he told me flatly.
He doesn’t trust Johnson to make that happen, either:
“They are counting on the ability to try to take border [funding], put it in reconciliation with tax cuts and roll us on spending,” he said, summarizing Johnson’s emerging strategy. “That ain’t gonna fly. So they should probably get religion now, or it’s gonna be a really long year.”
To a considerable extent, Roy is probably pushing on an open door. Trump may not care about deficits. But his proposed (and former) Office of Management and Budget director Russell Vought shares with the fiscal hawks a zest for decimating domestic government and particularly the low-income safety net, as Project 2025 (to which Vought was a major contributor) makes clear. And what’s changed since 2017 is that Trump himself may now favor selected deep budget cuts in discretionary programs in order to punish his perceived “deep state” opponents, a project for which key Trump ally and DOGE chairman Elon Musk will be a cheerleader and architect. Indeed, in cases where Congress might balk at spending cuts, Trump might deploy an expanded use of the constitutionally dubious mechanism of presidential impoundment (a simple refusal to release congressionally appropriated dollars), for which Vought is an outspoken enthusiast.
They’ve gone there before
Some of the more controversial budget cuts on the immediate horizon are familiar to Republicans and their opponents, because they were included in the massive budget reconciliation legislation advanced by the GOP in 2017. Known popularly as “Trumpcare” or the “Obamacare Repeal” legislation, a major component was actually an assault on Medicaid that would have cut benefits and shift costs to the states. It was never enacted, so unsurprisingly the same ideas are high on every GOP budget blueprint right now, along with cuts in multiple other low-income programs.
So get ready. Republicans have longed for a rollback in the New Deal and Great Society legacy for many decades, and despite this Republican president’s general indifference to fiscal discipline, the time may have finally come.
