It's the oldest trick in the Republican playbook. They are campaigns to cut spending and reduce government, but when it's time to pass actual laws, they'll instead increase spending. To distract you from that reality, they point out “waste, fraud, abuse.”
Hear well all the hype about Doji, an informal sector of government efficiency inspired by Elon Musk. Instead, leaders are giving Americans the impression that they can solve the inflation and debt crisis by sorting out foreign aid, selling vacant buildings, and reducing overpayments with programs where waste and fraud are features rather than bugs. It must be different this time.
The cute message about terrible wasteful spending that doesn't offend businesses or individual constituencies doesn't solve the current crisis.
The advantage is that Musk-led unprecedented conservative media campaigns have highlighted the need for wasted spending and reductions. On the downside, despite all social media talk, no one has presented a serious plan to cut, eliminate or restructure key programs driving deficits and inflation. In fact, in the December budget bill, Musk and Donald Trump supported an additional $110 billion deficit spending without using the so-called wasted program as an offset.
Recycle the idea of cutting off “waste, fraud, abuse” – “No, really this time!” – could have worked before the $7 trillion Covid-19 debt bomb. But it doesn't stop at $1.2 trillion in annual monetary printing needed to serve the debt benefits. Telling Americans that financial solvency can be achieved by reducing painless waste, reducing foreign aid, and making governments more “efficient” will fail.
The only way to curb inflation is to assess Americans and levels of the real source of the problem. It continues to condemn consensus spending by both parties, not “waste, fraud, abuse.” Reduce these programs or accept inflation – there's no midfield. The silver lining means that inflation bites created a mission to make trade-offs. Convening political will can end the dependence on certain programs.
You don't need AI tools or the Last Day Manhattan Project to figure out how to balance your budget. We already know what we have to do. The challenge lies in devising the correct message and political will to enact it.
The federal budget is not a mystery. According to the Congressional Budget Office, 2025 will bring in an additional $2 trillion deficit, bringing in $7 trillion and $5 trillion in revenue. This was before considering the expansion of Donald Trump's first term tax cuts. The CBO projects $1.1 trillion in interest on its debt, but these figures have been repeatedly revised upwards.
The decade outlook seems even darker whenever we push flaws beyond our expectations, especially given the CBO's unrealistic revenue forecast, its consistent underestimation of spending, and its inability to account for major catastrophes such as Covid-19, the Great Recession and annual weather disasters. For example, the CBO estimates its $7 trillion budget will only rise to $10.3 trillion by the end of the 10-year window, but our spending has already doubled, mainly due to Covid-19.
So, what drives the $7 trillion budget for fiscal year 2025? Let's break down major government spending.
The “unruly” of the budget makes up the overwhelming majority of tabs. In addition to Social Security, Medicare, Military and Veterans programs (both discretionary and mandatory), interest on debt will bring a total of $7 trillion to $5.2 trillion in budgets of $7 trillion. Tens of billions of dollars of Medicare are offset by user premiums, bringing the net “uncontrollable” spending closer to $5 trillion. Yes, shaving Pentagon waste and dealing with overpayments in Social Security and Medicare, but tightening eligibility will spark a political backlash that Trump doesn't want.
There is no hidden stockpile of “waste, fraud, abuse.” The only way to lower the deficit is to target the remaining $2 trillion. This includes discretionary spending and non-existent qualification programs such as Medicaid, food stamps, and housing.
Republicans must also delegate education, agriculture, transportation and energy spending to the state. They have to eliminate housing subsidies and mortgage giants like Freddie Mac and Fanny May. In other words, they must convince Americans that the choice is between dependent programs or permanent stagflation and affordable prices. The cute message about terrible wasteful spending that doesn't offend businesses or individual constituencies doesn't solve our current crisis. Honesty remains the only viable path.
Republicans need to create a settlement bill, enact stronger welfare reform than the 1996 measure, and strengthen discretionary spending over the 1996 measure. Some commentators argue that Social Security and Medicare are the only pathway to reducing deficits and the only pathway to ignore many “other essential spending” programs that are not universal. Coupled with substantial healthcare reforms to reduce consumer costs, this approach provides the only realistic way to deal with inflation.
Congress cannot focus solely on this tax cut. Yes, lawmakers need to extend tax cuts in 2017 and add target cuts to promote growth in small businesses, but unlike 2017, the main focus is to curb government spending. A candid discussion of the nature of these spending is essential to finally fulfilling the mission of lowering inflation.
