At a time of trillion-dollar annual deficits as the economy soars, President Trump’s budget proposal for fiscal year 2021 moves in the right direction—and yet it leaves much to be desired. Moving toward budget balance in 15 years is better than growing deficits indefinitely, but it still falls short of where the GOP was just a few years ago.
The last time the United States experienced deficits this high was in 2012, as the country was slowly climbing out of the Great Recession. We have no such excuse today.
Notably, public pressure and congressional fiscal hawks convinced then-Speaker of the House John Boehner, a Republican, to adopt a 10-year target to reach balance in the GOP budget proposal. Then-House Budget Committee Chairman Paul Ryan delivered said ambitious budget in April 2014, an election year, to rally conservatives around a powerful goal of stopping the bleeding.
That Ryan budget was never enacted, but the goal of balancing the budget in 10 years became the gold standard for budget proposals for many years. It lasted right up until Trump abandoned the goal in his second budget proposal.
For one, spending is higher now than it was back in 2014, and it is projected to grow higher still. Trump’s budget deals with Democrats to trade higher defense spending for higher domestic spending have made the fiscal situation yet worse.
And despite revenues growing even after the 2017 Tax Cuts and Job Act was adopted, spending growth continues unabated. According to the Congressional Budget Office, a 4% revenue increase was chasing an 8% spending increase, from 2018 to 2019. This can’t go on forever.
Without spending restraint, low taxes are in immediate danger of being reversed. High deficits and debt also threaten economic progress, dragging down growth and putting the country at risk of a future fiscal crisis during which interest rates would rise, and the federal government would find it difficult to fund even core constitutional functions, such as providing for our nation’s defense.
Moreover, profligacy today also means less fiscal space when the next recession hits. Now is the time to build up reserves.
Balancing the budget in 10 years has undoubtedly become harder to do, but abandoning this goal is the wrong approach.
Trump’s budget moves in the right direction by eliminating and cutting federal programs that perform functions that should be left to the people, states, and localities. It also makes progress toward reducing the growth in mandatory spending with good governance reforms and a zero-tolerance policy for waste, fraud, and abuse.
In addition, the president’s regulatory agenda helps the budget by growing the economy and saving taxpayer dollars with better policies.
Yet much more is needed to drain the swamp and limit Washington’s spending addiction truly. Returning to the goal of balancing the budget in 10 years or fewer should be high on the agenda.
This piece originally appeared The Washington Examiner