Dead On Arrival

The President has proposed a budget for 2021 as is his duty, but don’t expect it to pass unscathed. The Left is already pronouncing it “DOA” and there is enough in the proposal to make just about everybody mad at him. The fundamental flaw, which stands out immediately, is that it requires 3 percent economic growth for the next 15 years to have even the slimmest hope of balancing itself and reducing the deficit.

And that’s the good news in it.

It’s a $4.8 trillion whopper of a budget which reflects generally conservative priorities like cuts to foreign aid, environmental protection, federal education programs, and transportation. It also would slow growth in Medicaid from an automatic increase of 5 percent to a more modest 2 percent. (In DC when you reduce the rate of automatic growth of a government program the reduction is denounced as a “cut.”)

Recalling reforms to welfare state programs under the Clinton administration (which were ended under the Obama administration), Trump’s budget calls for work requirements for public assistance programs, will not be popular with Democrats.

Putting Your Mortgage On Your Visa Card

Most of the budget’s deficit reduction measures come from cuts to Discretionary Spending, which amounts to only about 40 percent of the total budget, while Mandatory spending programs like Social Security, Medicare and Medicaid reach now almost 60 percent.

It wasn’t always that way: In the 1960s Mandatory Spending was only 33 percent of the budget, but ever since then, it has been swallowing more and more of the total. It is projected to be 80 percent of the budget by the next 10 years. And that is the real problem the country is facing: Eventually, entitlement programs like these will take over the entire budget and discretionary spending on things like the national defense will be added to a deficit that is expected to become 80 percent of our GDP.