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- Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law ($225 billion a year by 2026).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.