Having won the election, Donald Trump faces the daunting challenge of getting something done. One of his biggest obstacles isn’t politics; it’s money. Trump has promised to cut taxes massively while keeping the government’s hands off Social Security and Medicare—autopilot programs that are consuming a growing share of the budget. “New spending would be more than 10 times larger than new revenue” under Trump’s plan, according to a Nov. 4 report from a pair of Washington nonprofits, the Committee for a Responsible Federal Budget and the Urban-Brookings Tax Policy Center. The biggest category of new spending in the Trump administration, the report says, would be interest on the national debt.
Budget math points to a problem for Trump. He may have vanquished Hillary Clinton and doubters in his own party, but his administration can’t defy economic gravity. It’s a simple fact that cutting taxes will increase red ink. And a mature economy like that of the U.S. doesn’t suddenly begin growing at 5 percent or 6 percent annually, as Trump has promised—especially if its working-age population is trimmed by the deportation of undocumented aliens, as Trump has also promised. Interest rates soared on Nov. 9 as bond investors digested the election results.
But Trump won’t have as free a hand when it comes to rolling back regulations the Obama administration has put in place. No president can unilaterally undo regulation, says Jason Grumet, president of the Bipartisan Policy Center: “He could start a notice of proposed rule-making, but that wouldn’t have the splendor he is looking for.”