The low-hanging fruit for President-elect Donald Trump is spending cuts. My friend Chris Edwards, director of tax policy studies at Cato Institute, gives his advice here:
So let me suggest some wasteful spending that the new administration should tackle, and the annual savings from terminating each:
- K-12 school subsidies, which generate bureaucracy and stifle innovation ($25 billion).
- Farm subsidies, which enrich wealthy landowners and harm the environment ($25 billion).
- Rural corporate welfare, which is handed out by the Department of Agriculture ($6 billion).
- Energy subsidies, which have been one boondoggle after another ($5 billion).
- TSA airport screening, which Trump has said is “a total disaster” ($5 billion).
- The war on drugs, which wastes police resources and generates violence ($15 billion).
- Excess pay for federal workers, especially gold-plated retirement benefits ($33 billion with a 10 percent cut).
- Housing subsidies, which distort markets and damage cities ($37 billion).
- Community development aid, which is corporate welfare used for buying votes ($11 billion).
- Urban transitand passenger rail funding, which are properly local and private activities ($12 billion).
- Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law ($225 billion a year by 2026).
President Trump will face major budget pressures in coming years as deficits and entitlement spending soar. Today’s $600 billion deficits are headed toward $1 trillion, and deficits will be even higher if a recession comes along.
Federal spending cuts would help avert a fiscal crisis and boost growth by reducing economic distortions. The incoming Trump team should start with some of the cuts here, and there are plenty more proposals at DownsizingGovernment.org.
Chris Edwards discusses what a Trump or Clinton election win would mean for the economy
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