Elon Musk, President-elect Donald Trump’s bounciest adviser, thinks he can identify “at least” $2 trillion in federal budget cuts. Although critics derided the billionaire entrepreneur’s suggestion as improbably ambitious, that assessment hinges on political assumptions rather than a cleareyed understanding of what could be accomplished if Trump were serious about restoring fiscal discipline.
Unfortunately, there is little reason to think he is. Trump’s record during his first term and his positions during his 2024 campaign suggest he will continue the federal government’s longstanding pattern of unrestrained borrowing even as the imbalance between revenue and spending becomes increasingly dire.
Cutting $2 trillion from the federal budget, which totaled $6.8 trillion in fiscal year 2024, would return us to the level of spending recorded just five years ago, which gives you a sense of how quickly things have gone from bad to worse. The Congressional Budget Office projects that the annual deficit, currently $1.6 trillion (5.6% of GDP), will reach $2.6 trillion (6.1% of GDP) by 2034.
Those deficits add up. The total federal debt held by the public is more than $28 trillion, which is nearly the size of the U.S. economy. By 2034, the CBO projects, that number will reach 116% of GDP, “the highest level ever recorded.”
More debt means more interest, which currently accounts for 13% of the federal budget and 3.1% of GDP. By 2034, the CBO estimates, those numbers will rise to 16% and 3.9%, respectively.
During his 2016 campaign, Trump risibly claimed he would eliminate the national debt within eight years. But even before federal spending spiked in response to the COVID-19 pandemic, his own budget estimated that the number would instead rise from $14.7 trillion in 2017 to $22.8 trillion in 2025.
By the end of Trump’s term, the Committee for a Responsible Federal Budget calculated, he had signed legislation and issued executive orders that, on balance, added $8.4 trillion to the national debt (including interest) over 10 years. As of last June, the corresponding figure for President Joe Biden was $4.3 trillion.
During his 2024 run, Trump expressed approximately zero concern about any of this. To the contrary, the Republican platform in effect promised more borrowing to finance “large tax cuts,” an expanded military budget and “the largest deportation operation in American history.”
The platform also promised that Trump would “fight for and protect Social Security and Medicare with no cuts, including no changes to the retirement age.” Given the looming financial crises in those entitlement programs, which will include mandatory, across-the-board cuts to Social Security benefits in a decade, that commitment is utterly reckless.
Adding together all of Trump’s promises, the Committee for a Responsible Federal Budget estimated that his fiscal plans would add about $7.8 trillion to the national debt over 10 years. The corresponding estimate for Vice President Kamala Harris was about $4 trillion.
Even if we ignore Trump’s off-the-cuff talk about eliminating taxes on tips, overtime pay and retirement benefits, he has promised to oppose reductions in military spending, Social Security and Medicare. Together with interest payments, those three programs account for three-fifths of federal spending.
Given Trump’s priorities, it is hard to see how he can possibly deliver anything like the spending reductions that Musk imagines, even with the cooperation of a Republican-controlled Congress. Tackling “fraud, waste, (and) abuse,” while worthwhile, would not come close to achieving that goal.
There is no shortage of feasible plans for preventing the bankruptcy of old-age programs, reining in the national debt, reducing the burden of interest payments, and ameliorating the economic costs that fiscal incontinence will impose on our children and grandchildren. But all of them require hard choices, compromises and reckoning with the consequences of shortsighted policies that prioritize immediate political rewards over long-term prosperity.
The longer we wait, the harder those choices will be. We cannot afford another four years of kicking the can down the road.
Jacob Sullum is a senior editor at Reason magazine. Follow him on Twitter: @jacobsullum.