How Trump/DOGE Can Balance The Budget And Eliminate $110 Trillion Of Future Debt, Part 2

At some point budget strategy needs to abandon the realm of consistent philosophy and deal with the reality of contemporary American politics. That’s especially the case when the Federal budget has not been even close to balance for a quarter century and when the combination of an aging welfare-consuming population and a shrinking revenue-producing native born work force is laying the planking for cataclysmic budget deficits. In fact, under the auto-pilot of current tax and spending policy the public debt would reach $150 trillion during the quarter century just ahead.

Accordingly, our Trump/DOGE balanced budget plan assigns three-fourths of the job of closing today’s yawning budget gap to spending reductions and one-fourth to revenue increases—with the latter being generated by an optimum combination of lower income taxes and higher consumption taxes on imports and tax exempt foundations, as described in Part 1 ( How Trump/DOGE Can Balance The Budget And Eliminate $110 Trillion Of Future Debt).

Here we address the $1.5 trillion of outlay reductions targeted for the final Trump budget in FY 2029, along with the rationale and policy anchors that would enable the current Federal spending baseline to be cut by nearly 20% within the next four years. At the highest level of generalization these policy anchors amount to bringing the Empire home on the international front and devolving many of today’s Washington-based domestic social programs back to state and local governments. That is to say, these cuts are based on spending principles that embody a double-whammy shrinkage of the Leviathan on the Potomac.

In summary terms, therefore, our watchwords are America First abroad and a revitalized Federalism at home. When applied to the details of the Federal budget, these over-arching principles, in turn, translate into the aforementioned $1.5 trillion per year of spending cuts, as follows:

Trump/DOGE Balance Budget Plan Spending Savings, FY 2029

• America First national security policy: $500 billion.

• Means-tested entitlements Block Gran with 20% cut: $260 billion.

• Education, Social Service and community aid Block Grant with 20% cut: $34 billion.

• Medicare payments system reforms generating 5% efficiency savings: $74 billion.

• Means-test top 10% of wealthiest Social Security recipients and recoup 20% of benefits: $134 billion.

• Eliminate all energy subsidies: $60 billion.

• Slash farmer and business subsidies: $70 billion.

• Implement DOGE-style staff cuts of 34%: $130 billion.

• Subtotal, FY 2029 program savings: $1,262 billion.

• Interest expense savings from lower deficits in FY 2026 to 2029: $238 billion.

• Total FY 2029 outlay savings: $1,500 billion.

• CBO Baseline outlays for FY 2029: $8,228 billion.

• Trump/DOGE savings as % of CBO baseline: 18.2%.

As is evident from the table above, 40% of the $1.262 trillion of program savings (i.e. excluding interest savings) result from bringing the Empire Home ($500 billion) and 60% ($762 billion) from devolving the Federal programs back to lower levels of government and the private sector. The implication is that the route to fiscal salvation necessitates a hair-curling depression inside the Washington beltway—a cleansing that is long overdue and which would be thoroughly aligned with sentiments and economic interests of Donald Trump’s base in Flyover America.

As to the 40% savings component, it first needs be recognized that if Trump’s “America First” focused foreign policy means anything at all—- it’s that the current $1 trillion national security budget is double the size that a muscular homeland defense shield actually requires. Indeed, it is no exaggeration to say that in relentless pursuit of its own aggrandizement, the military/industrial/intelligence/foreign aid/NGO/think tank complex has massively inflated America’s Warfare State into an “extra-large” when what is really needed in the world of 2024 is a snug-fitting “small”.