Nothing President Donald Trump said in his first speech to Congress, and nothing visible on this year’s budget battle horizon, will change the grim realities of the long-range federal fiscal forecast.
Trump continues to sound like he’s out to refashion the Republicans as populist protectors of elderly Americans and their expansive government safety net, and GOP leaders on the Hill newly sound like they aren’t going to do anything to stand in his way. That represents a fundamental retreat from three decades of party orthodoxy, which could revive the sort of ballooning annual deficits long derided by Republicans as the enemy of national economic stability.
This has nothing to do with the 10 percent increase in military spending Trump is advocating, which he’d pay for by cutting an equivalent $54 billion from education, the environment and other domestic programs.
That headline-inducing trade-off already looks dead on arrival at the Capitol — the boost rejected by defense hawks as too timid and the nonmilitary cuts spurned by lawmakers in both parties as impractically draconian. But at least the simplistic equation had the virtue of neutrality toward the budgetary bottom line.
Not so the all-but-formalized decision by the Trump administration to propose no changes whatsoever for Medicare, Social Security, veterans benefits and the other big entitlements. These are otherwise known as “mandatory” programs because the government is mandated to cover whatever the beneficiaries are entitled based on formulas and eligibility rules that Congress is under no obligation to revisit each year.
Just as he never mentioned North Korea or Russia, two of the nation’s most nettlesome overseas adversaries, in his address Tuesday night, neither did he say a word about entitlements, which are a comparably vexing and enormous challenge domestically.
That’s because they already combine to account for three-fifths of the budget, and that is twice as much as the $1.2 trillion being spent this year on “discretionary” programs, from the Pentagon to the arts agencies, which are subject to annual appropriations decisions. (The rest is interest on the national debt.)
Thanks mainly to the aging baby-boom population, annual entitlements will grow by almost $500 billion, or 18 percent, just during this presidential term unless Congress and Trump come up with a plan to curtail the outlays. Just 10 years from now, entitlements will have mushroomed 73 percent more than currently, cresting $4.3 trillion. That will be almost two-thirds of the entire federal budget, and also almost triple what the appropriators have to allocate assuming a continuation in the very slow pace of recent growth in discretionary spending.
And unless taxes are increased along the way — which both Trump and the GOP Congress remain unalterably resistant to — the cost of doing nothing about entitlements will quickly grow stark. The nonpartisan Congressional Budget Office projected last month the annual deficit will rise from $560 billion this year to $1 trillion in six years and $1.4 trillion in 2027, which would equal 5 percent of the economy. And the cumulative effect of those steadily widening budget imbalances would mean adding $10 trillion to the national debt in the next decade, the CBO estimates.
The fever line
Such dramatic trend lines are nothing new, but they do get slightly more alarming each time another year passes without any legislation to slow or shallow the trajectories — which would happen, perhaps dramatically, depending on how deeply entitlement benefits got curbed or how much eligibility was limited.
By remaining silent on that score, Trump is absolutely staying true to his campaign promise to keep Medicare, Social Security and Medicaid just as they are.
The much more newsworthy silence comes from Speaker Paul D. Ryan, whose rapid rise from young Wisconsin backbencher to the principal policy playmaker in the House was fueled by a passionate advocacy for entitlement curbs, which he views as the central ingredient for balancing the budget, and creating a new era of national fiscal health.
“This is a once-in-a-generation moment,” Ryan said Tuesday of the legislative year ahead, because the first entirely Republican power structure in Washington in a decade creates “the opportunity to finally tackle big problems that have held us back for so long.”
But the roster of a half-dozen topics he then enumerated made no mention of corralling the growth of entitlements. Asked if that meant the issue had been dropped for the year, the speaker quipped “I never give up a dream” and took no more questions at his news conference.
He told some other reporters during the day that he believes Trump might still be someday persuaded to limiting Medicare and Social Security for people who retire in the future “because if you don’t start bending the curve in the out years, we are hosed.” But that night, Ryan nonetheless labeled Trump’s speech a “home run,” and to be sure, the president did come close to endorsing Ryan’s plan for taxing imports and embraced the House GOP leadership’s framework for replacing the 2010 health care law.
Still, Ryan’s apparent willingness to back away from the central crusade of his congressional career is further evidence of his awkward position in the capital power structure of 2017.
Having criticized Trump’s temperament and ideology repeatedly during the campaign, without ever flatly repudiating him, while at the same time enduring regular putdowns from the GOP nominee for having focused on fiscal austerity and then losing as the vice presidential candidate of 2012, Ryan is not in the best position to wage a war for the Republican Party’s philosophical soul. The president is the de facto head of his political party, no matter how improbable his victory or how low his initial approval ratings.
So if Trump sticks with his unusual recipe of nationalism and economic populism as a replacement for fiscal discipline and a smaller social safety net as the pillars of GOP orthodoxy, for now Ryan and the rest of the party hierarchy in Congress have little choice except to get with the program or get castigated by the party’s base for undermining their top commander.
Many Republicans on the Hill had been counting on two of their own now in the Cabinet — White House budget director Mick Mulvaney, previously a House Freedom Caucus stalwart from South Carolina, and Health and Human Services Secretary Tom Price, a Georgian who was previously the House Budget Committee chairman — to successfully sell Trump on the notion that pushing entitlement restraint in the name of long-term government solvency would be an important way to cement an economic legacy.
Although the first written outline of Trump’s initial budget won’t be delivered to the Capitol for two weeks, his opening preview and his first congressional address have made clear that argument did not get very far.