Candidates AWOL on Plans to Cut Spending

Lowering taxes is only the first step, Mr. Trump.


Todd Kranin

Donald Trump is the most recent Republican presidential candidate to release a plan to reform our burdensome tax code. Though all the proposals are different, they share common characteristics. They would cut income tax rates on households, lower the tax code's bias against savings and investment, close some loopholes, and reform America's anti-competitive corporate income tax system. Now all they need to be politically credible are sister plans to produce concomitant levels of spending restraint.

According to the Tax Foundation, none of these plans would be revenue-neutral. Contrary to what you hear, that's a good thing, because it means they would reduce the amount of money the government collects from us. Using a static model that assumes people do not change their behavior much, over 10 years government revenues would shrink by $2.97 trillion under Rand Paul's plan, by $4 trillion under Marco Rubio and Mike Lee's plan, by $3.6 trillion under Jeb Bush's plan, and by $11.98 trillion under Trump's plan.

In contrast to the figures produced with a static model, a dynamic scoring of the plans reveals that Paul's plan would most likely cut taxes by $960 billion, Bush's by $1.6 trillion, Rubio-Lee's by $1.7 trillion and Trump's by $10.14 trillion.

Starving the government beast may sound great, but enacting a very large tax cut in a fiscal environment of large deficits would be politically problematic. According to the Congressional Budget Office's most realistic scenario, under the current tax-and-spending plan, spending as a share of the economy would jump from 20.5 percent this year to a whopping 30.4 percent in 2040. Revenue as a share of the gross domestic product would slightly increase, from 17.7 percent today to 18.1 percent in 2040. The gap between revenues and spending is worsening, and it would be even larger with the candidates' tax plans.

Moreover, the true size of government is measured by how much it spends, not by how much it collects. Hence, to truly starve the beast, the only sensible approach—both politically and economically—is to also propose serious spending restraint. To be sure, Sens. Rubio and Paul, as well as Bush, are on the record saying they favor spending cuts and genuine entitlement reform. Also, according to estimates, each of their tax bills would boost growth and produce some degree of revenue feedback (at least in the future).

However, if history is our guide, these candidates are not representative of the Republican Party as a whole. Cutting taxes is great, but as I said, it must be done alongside genuine spending restraint—meaning serious changes to Medicare, Medicaid, Social Security, and Affordable Care Act subsidies, which are consuming an ever-growing share of the budget. Doing one without the other would just kick the can farther down the road, an exercise that politicians are very good at.

The good news for the candidates is that a plan to cut spending isn't that hard—on paper, at least. The Cato Institute's Dan Mitchell calculated that we could balance the budget by 2021 by capping spending growth at 2 percent annually. Allowing spending to grow by 3 percent annually would balance the budget by 2024.

Now, those numbers are based on current tax policy. If lawmakers want big tax cuts, there will need to be commensurately greater levels of spending restraint.

The difficulty, of course, is to persuade politicians to implement such spending constraints and actually stick to them in the long run. That's made harder by the fact that the only realistic way to limit spending growth to 2 or 3 percent per year is to reform the fastest-growing programs in our budget, or the so-called entitlements. That would require standing up against the politically powerful special interests that benefit from these programs.

Candidates looking for reasons to take that courageous step may find comfort in the fact that we have no choice. By introducing plans now, candidates would show how serious they are about controlling deficits and the driver of our future debt—and they would make their tax plans much more politically credible.


NEXT: We Need to Stop Acting as Means to Politicians' Imperial Ends

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  1. The odds that any politician will run on a platform of cutting defense or entitlement spending is about zero. Hell, even Gary Johnson said he would save Social Security.

    The only program a majority of Americans want to cut is Foreign Aid, which is about 1% of fed spending. Of course, the fact that it is a small percent of the budget is no reason not to cut it. The only cuts that could pass would be across the board cuts. Anything else would just lead to endless arguments about what to cut.

    If you want to get an idea of how hard it is to change minds about this, here is an experiment you can try. Try to convince a relative or friend that there is no reason to have drivers’ licenses. You might say: they’re a pain to get and renew, they don’t keep bad drivers off the roads, and 100 years ago, no one needed a license to ride a horse.

    My prediction is that they will look at you like you just walked out of a flying saucer.

    Most people like rules. Rules give them a sense of safety as well as the illusion of having control over other people. I’m convinced that the thing that really gets Planned Parenthood supporters excited is that they are forcing icky Christians to pay for abortions.

    1. “The only program a majority of Americans want to cut is Foreign Aid,”

      Great place to start then.

      1. Reason doesn’t want to cut Planned Parenthood or refugee immigrant welfare. It’s nothing but rounding errors all the way .

        Foreign Aid is a great place to cut because conservatives can be easily persuaded to cut military spending when you sell it as reducing European faggots and troublesome wogs free-riding off the sacrifice of American blood and treasure.

        1. “or refugee immigrant welfare.”

          Honestly this new one sickens me to the core. I doubt the refugees we are taking in particularly care if they go to Germany or Sweden or the US.

          All we are doing is helping the EU politically so they can continue to suck on the tit of our gigantic money burning, liberty destroying, murdering, war machine and therefore wave hands in the air and justify its existence.

          1. No shit. Back in 2003 when so many Euros were shouting “No blood for oil!” I was wondering why they got a pass for such ignorance. I mean, the US typically imports about 2~3% of its oil from the middle East while Europe gets something like 30% or more from that region. If the US was invading Iraq for oil it was mainly for Europe’s benefit.

        2. “Reason doesn’t want to cut Planned Parenthood or refugee immigrant welfare.”


          1. Well, there was an article defending Planned Parenthood funding.

          2. Only a lie because ‘Reason’ can’t have an opinion.

            Authors and editors do though, and so far they have either argued against the cuts or dodged the issue.

    2. I think the key is to move the conversation to the details. People may be in favor of “a federal jobs program for veterans,” but that doesn’t mean they’ll support a dozen of them, and I think there are about a dozen. And do they work? What does it cost, per job? If it’s $1,000 nobody will complain. If it’s $250,000 then they will.

    3. As long as politicians keep saying that in the long run SS (incl. Medicare & SSI) will neither fund nor be funded by general revenues & expenses, we need to see separate figures for the SS & general acc’ts. What I keep seeing here about attacking the budget by cutting or restraining SS & Medicare makes sense only if you expect SS to run a surplus & fund the rest of fedgov indefinitely. If not, then both SS & non-SS spending need to be restrained.

  2. It’s infuriating that Paul isn’t coming out for ending the WoD. It should be the conservative postion because it’s about less government in your private life.

    1. We’re making progress. Christie is about the only candidate who won’t pay at least lip service to state sovereignty on the matter. Trump still hasn’t recanted his 25 y/o proposal to legalize all drugs. It’s telling none of the other candidates have tried to beat on him with that, yet.

      1. It bothers me that when you look at policy, Trump isn’t identifiably worse than most major candidates for prez, yet HyR jumps on the Establishment bandwagon to beat up on him. Look above: 10 times the tax cutting of Rand Paul! Or the anti-drug-war statement you bring up. Plus, he talks of foreign affairs in terms of what they cost the taxpayers.

  3. Derponomics: Shock Therapy for the US

    1. Repeal the income tax and replace it with nothing
    2. Cut the budget across the board by 69%. That leaves about $1 trillion of spending which will be paid by the $1 trillion of payroll taxes

    While I’m fantasizing:

    3. End the fed and replace it with gold standard

    1. 1. Repeal the income tax and replace it with nothing

      Honestly just do that. The spenders really cannot legitimately complain about deficits so it is actually doable.

      1. Without spending cuts, inflation would rise to double digits quickly.

        1. Nah

          The global recession we have been in for the past 7 years and the coming Great Depression will keep prices down.

          Again the spenders do not give a shit about government spending causing inflation why should tax cutters?

          1. Also hyper inflation if it does come would be a great way to bring back an ad-hoc de-facto gold standard.

            1. libertarians should really give up on the US dollar. Our opponents obviously don’t care and fixing it (or in reality propping it up) only enables them to grow government and squish liberties.

              1. Eh, it’s OK for spending. I plan on adding to my silver collection rather than investing in stocks.

          2. “Again the spenders do not give a shit about government spending causing inflation why should tax cutters?”

            I missed this point before. The spenders would accuse the cutters of supporting gigantic deficits rather their “modest” ones. Even so, if there was a successful movement to end the income tax while spending stayed the same, I’d be happy with that.

    2. *with a gold standard

      A silver/gold standard would be OK too.

    3. Does anyone know exactly how the Federal head tax was collected prior to the 16th amendment? Did individuals pay it or did the States. I can’t find anything about it.

      1. wiki sez:

        “The United States government levied direct taxes from time to time during the 18th and early 19th centuries. It levied direct taxes on the owners of houses, land, slaves and estates in the late 1790s but cancelled the taxes in 1802.”

        Revenue came from tariffs before the Civil War and after. There was an income tax from 1861 to 1872 and then from 1913 on.


  4. “none of these plans would be revenue-neutral. Contrary to what you hear, that’s a good thing, because it means they would reduce the amount of money the government collects from us”

    Looking at the past billion years (Obama/Bush years) it seems revenues really have nothing to do with spending.

    Spenders really have no problem spending so isn’t it odd that tax cutters have such a hard time cutting?

  5. Elections are now Politicians VS The Citizens of the United States.

    You’re either voting with politicians, or against them. That is all.

    1. You know who else was a wise Latina ….

      1. I got nothing.

      2. Hugo Chavez in drag?

      3. Salma Hayek?

      4. Eva Peron?

    2. That’s fucking rich….haaahaaaahaaaa. Fire up the (woodchipper) guillotine.

  6. Politicians are very good at giving the people what they want. It turns out that the voters want three things:

    1. They want lower taxes. Duh.
    2. They want *more* spending. On everything. Especially grandma’s social security.
    3. They want a balanced budget.

    Clearly, politicians can’t deliver all three, the best they can do is two. So they figure out which of these items is the voters’ lowest priority, and ignore that one. That happens to be #3.

    Unfortunately, I don’t think anything short of a massive fiscal catastrophe will change this.

    1. They can’t deliver on all three so the deliver on non, all or none. They will say all three, but they know that they won’t deliver, they want to get re elected and THAT is all that matters

  7. Candidates looking for reasons to take that courageous step may find comfort in the fact that we have no choice.

    “If you choose not to decide you still have made a choice.”

  8. Their addition to big government is worse than alcohol, nicotine, and crack cocaine.

  9. A reminder: Sen. Paul has a plan with a grain of specificity wrt spending, favoring what he has called the “Penny Plan” for several years. Going Dan Mitchell’s calculations one better, he favors cutting actual Federal spending by one percent each year until the budget reaches balance — in just six or seven years, by some calculations — and maybe after that, as well.…..47501.html

    1. Is that actual cutting, or reductions in increased rate of spending?

      Considering the gnashing of teeth, tearing of hair and rending of garments that occur when reduced rates of increases are even suggested I would say his plan is unlikely to be implemented. Hell, the dems were just threatening to shut down the government (not really shut down) over funding for planned parenthood (0.000011 % of the federal budget).

      Also, I have it on good authority that there is nothing. left. to. cut.

  10. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ??????

  11. You can hardly expect any politician to detail specific spending cuts before elections; they would simply not get into office as the potential losers would loosen a smear campaign against them.

    1. Not only the potential losers but the media, who loves them some big government spending, would find all kinds of sob-stories of the poor unfortunates who would be devastated by losing their government lucre.

  12. Spending cuts? Seriously? Spending is the mother’s milk of politics. There will be exactly zero spending cuts until the dollar collapses and chaos ensues. As a practical matter, we are long past the point of no return on prudent economic policy. We are intent on testing whether the laws of economics applied to sovereign economies are really laws or just suggestions. With any luck, I’ll be long gone before the answer is evident.

  13. “Contrary to what you hear, that’s a good thing, because it means they would reduce the amount of money the government collects from us. ”

    All other things equal, it means that the same amount of money will be collected from us, but the timing will be different. i.e., will be collected from our kids and grandkids.

  14. Did sequestration get nerfed yet? I can’t recall…

  15. I make up to $90 an hour working from my home. My story is that I quit working at Walmart to work online and with a little effort I easily bring in around $40h to $86h? Someone was good to me by sharing this link with me, so now i am hoping i could help someone else out there by sharing this link… Try it, you won’t regret it!……


  16. Republicans NEVER cut spending. Even Senator Phil Gramm, the self-proclaimed king of spending hawks and anti-pork crusaders, voted for the Superconducting Supercollider, a massively wasteful science boondoggle which would have produced zero profitable applications or spin-offs, and whose measurements would have been meaningful to fewer than 200 scientists in the whole world. He voted for this gigantic slab of pure, unadulterated pork because the Feds proposed building it in his state.

    There is no such thing as a Republican fiscal conservative. All their talk about the debt and the evils of spending is empty rhetoric and has been so since AT LEAST the early 1980s. Any libertarian who votes Republican because of fiscal issues is a fool.

    1. Dumbfuck, D’s don’t either….what’s your point.

      You should , like toenail. find another place to dead thread-fuck.

  17. You want to see spending get cut?! Elect Rand Paul as President and for the first time in our lifetime, we will see real reductions in spending. Alternatively, we can sit back and watch the remnants of greatest system of government ever devised by man, fade into oblivion along with our country. Vote for Rand Paul. Do what you can. Tell your friends and family. Volunteer. It’s time to take our country back! Rand Paul 2016!

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