Trump puts America on path to fiscal ruin

It became very clear this month that neither the Trump White House nor its allies on Capitol Hill want you to know that the federal budget is already in very bad shape ... and getting worse. It happened when the Treasury, the official keeper of Washington’s financial results, issued its monthly statement for the first 10 months of fiscal year 2018 about federal revenue, spending and, therefore, the budget deficit.

The federal government’s red ink this year is already 21 percent above what it was in 2017, and there are few prospects that the bottom line will improve anytime soon.

Except with infrequent and unsubstantiated platitudes about how the situation is going to get better, the Trump White House and Republicans in Congress have been doing everything possible not to talk about the budget this year. To avoid tough questions and politically embarrassing votes, the House and Senate have even refused to consider a budget though they are required by law to adopt one. But this year isn’t the real issue. Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.

The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some president and Congress decide to reverse them — that is, to increase taxes and make cuts to popular programs. Not only has there been little appetite to do that, many in Congress and the Trump administration seem to be hellbent on ignoring the deficit and national debt and increasing spending and reducing revenue even further.

For example, the White House last week proposed a new Space Force that could add billions to the Pentagon budget. Trump has asked for $25 billion for the wall he wants to build along the U.S.-Mexico border. His much talked about but still unseen infrastructure plan would cost billions more.

When the House returns to Washington in September, it is set to consider another tax cut that could reduce revenue by an additional trillion dollars.

None of this includes the natural and man-made disasters — everything from earthquakes, forest fires and hurricanes to military, terrorist and foreign policy situations — that occur each year and cost more than planned. Nor does it include interest on the national debt. The combination of big increases in federal borrowing from the very large deficits and the need for Washington to roll over its sizable short-term debt at higher interest rates will make this the fastest growing spending of all.

And all of this is happening when the economy is doing well. The relatively mild economic downturn that many are saying will occur over the next few years will lower revenue and increase the deficit even further. That makes the Trump administration’s extreme reluctance to comment on the deficit report from its own Treasury understandable.

The White House was actually refusing to comment on three key issues:

❚ How big the annual deficit could get in the years ahead. The Congressional Budget Office is already projecting it will exceed $1.5 trillion by 2028, and that assumes no changes from existing taxes and spending laws and no recession.

❚ How it will pay for more tax cuts, a Space Force, the wall, infrastructure or anything else ... including reducing the deficit.

❚ How it’s going to manage the economy out of a recession if one happens on its watch. The traditional federal response of tax cuts and spending increases might not be as politically palatable as it has been in the past given that it could drive the annual deficit to close to $2 trillion.

Budget policymakers on Capitol Hill and in the Trump White House obviously aren’t focusing on much beyond 2018 and 2020. But they should at least be willing to admit there’s a problem that will continue long after the votes have been counted in those elections.

Stan Collender teaches federal budgeting at the McCourt School of Public Policy at Georgetown University and is the founder of thebudgetguy.blog.