Trump is suddenly obsessed with the ballooning federal deficit after his signature legislative victories caused it to explode
- President Donald Trump is suddenly obsessed with the growing federal deficit, according to a new Washington Post report.
- Trump's major legislative achievement - the GOP tax law - is a major driver of the exploding deficit.
- The possibility Trump will actually take action to reduce the deficit is slim.
- The president is still pushing deficit-busting ideas, and House Democrats are unlikely to get on board with any major deficit-focused bill.
President Donald Trump is suddenly very interested in reducing the federal deficit, which is on the rise after two years of debt-adding policies pushed by the president.
According to a new report from The Washington Post, Trump has demanded that Cabinet officials work on a way to reduce the federal deficit. He has apparently repeatedly expressed concern over the past few weeks regarding the growing amount of debt the federal government is taking on.
Trump requested that the officials find a way to cut 5% from each of their budgets, and he is looking for other ways to bring the exploding deficit under control.
The impetus for the concern, according to the Post, was the Treasury Department's report in October that showed the federal deficit grew to $779 billion in fiscal year 2018 (which ran from October 2017 through September 2018). That was the highest annual budget deficit since 2012.
The new focus is a major departure from Trump's previously dismissive attitude toward the deficit. For instance, the Post story confirmed an anecdote first mentioned in journalist Bob Woodward's book, "Fear: Trump in the White House."
When former economic adviser Gary Cohn first brought the issue to Trump's attention, the president suggested that the US could simply print more money to pay off the debt and did not appear fazed by the possibility of rising deficits.
This attitude toward the deficit was also reflected in Trump's major legislative pushes in his first two years in office.
A substantial contributor to the deficit is Trump's signature legislative achievement - the GOP tax law, which the Congressional Budget Office (CBO) estimated will add $1.5 trillion to the deficit through 2028.
Despite promises that the law would not add to the deficit, the TCJA already helped to push the federal government's borrowing levels to their highest since the depths of the financial crisis.
Other legislative actions undertaken during Trump's time in office will have an outsized effect on the deficit over the next few years.
According to the Committee for a Responsible Federal Budget, $262 billion of the 2018 fiscal year deficit - roughly one-third of the total - was caused by legislation passed under Trump. And $445 billion of the fiscal year 2019's projected deficit - roughly 45% of the total - will be caused by new measures. In total, the group projected that new legislation will add $2.4 trillion in new debt by 2027.
But despite Trump's sudden interest in the debt, the Post report makes clear that the president has no clear plan to address it.
Trump is still pushing for a variety of policies - such as another tax cut for the middle class and a large infrastructure package - that would add a substantial amount of debt.
But even if the president did assemble some sort of spending cuts package, the newly divided Congress would be unlikely to pass any sort of major cuts. The one item that is consistently floated as an area where Trump and House Democrats could possibly work together - infrastructure - would likely add even more to the deficit.