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Trump’s Big Challenge: Getting Things Done Without Money

Bloomberg Businessweek

Thursday, November 10, 2016

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.”

KEYWORDS: 2016, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET, DONALD TRUMP, JASON GRUMET, PRESIDENT BARACK OBAMA