America is now drowning in $36 trillion in federal debt.
While past efforts to reform our nation’s finances have failed, Washington, D.C. will have a new sheriff in town after Jan. 20, leading a posse with plans to take the bold steps necessary to clean up our fiscal mess. To achieve different results compared to past efforts will require Republican unity.
Thankfully, President-elect Donald Trump’s plan to restore America’s economic stability has close allies in Congress. In an interview with the Daily Caller News Foundation, Republican Kentucky Rep. James Comer, chairman of the House Oversight Committee, outlined his new Subcommittee on Delivering on Government Efficiency (DOGE), led by Republican Georgia Rep. Marjorie Taylor Greene.
“I don’t think there’s going to be any shortage of waste, fraud and abuse for that subcommittee to investigate,” Comer said.
Comer said DOGE will find healthcare savings, through reducing Medicare fraud and reforming areas like pharmaceutical patents and pharmacy benefit managers.
“One of the things I would encourage those to do — in this administration and Pam Bondi — we need to encourage our U.S. attorneys to focus more on Medicare and Medicaid fraud,” Comer said. “It’s not a priority for a lot of jurisdictions, and that’s something that needs to be a priority.”
Comer said Congress will adopt DOGE cuts through a legislative process known as “reconciliation” that doesn’t require a 60-vote threshold in the Senate.
“You’ve got to do it on reconciliation, because you’ll never get 60 votes,” Comer said. “Democrats don’t want to cut anything, right? Nothing.”
Comer’s DOGE bears a similar name to Trump’s Department of Government Efficiency (DOGE), which will be run by Elon Musk and Vivek Ramaswamy.
Trump’s DOGE has set its own deadline at July 4, 2026 (America’s 150th birthday). Comer said he plans to keep his DOGE subcommittee throughout the entire 119th Congress, which ends in January 2027.
Ramaswamy told Fox News’ Maria Bartiromo that DOGE is “the greatest effort to downsize government in our lifetime” and that, “We expect certain agencies to be deleted outright.”
Comer said the Department of Education is a prime example of a duplicative federal bureaucracy that has outlived its usefulness.
He said it is duplicative because each state has its own Education Department. Comer said it’s better to cut out the middleman and send federal education funding directly to the states in the form of block grants. Federal student loans can be administered by the Treasury Department.
Comer said he would love to bring Democrats on board, but he is no Pollyanna.
“I have yet to meet a Democrat in Congress that’s concerned about $36 trillion debt, that’s concerned about Social Security running out of money,” Comer said. “There may be one, but I haven’t met them or they’re very secretive on their opinions.”
This can’t wait any longer.
Our debt-to-GDP ratio, e.g. the size of our debt compared to our productive economy, was less than 31 percent in 1980, growing to nearly 57 percent by 2000 and mushrooming to 120 percent today, according to the Federal Reserve Bank of St. Louis. This is unsustainable and will bankrupt America’s future.
Conservatives have a golden opportunity to create a generational shift in America’s fiscal future. The only way these massive spending reforms will take place is if Republicans remain unified.
During Trump’s “off-season,” he garnered a fairly successful track record in primarying squishier Republicans who would be far less likely to use the political muscle we need to stop our fiscal drift. Comer is confident that Trump’s cost-saving agenda will pass, thanks to GOP unity.
“Obviously, I can only speak for the House,” Comer said. “We can get, I think, just about everything they want, passed out of the House.”
We’ve become awash in feckless spending, unmoored by excessive COVID-19 stimulus packages (riddled with fraud), followed by more in Green New Deal scams and pet project giveaways.
Trump and congressional Republicans earned a powerful mandate to rein in government spending, which will also lower inflation. It’s what the American people desire and deserve.
Shortly before his death in 2006, I had the privilege of interviewing Milton Friedman over dinner in San Francisco. The last question I asked him was: What are the three things we had to do to make America more prosperous?
His answer I have never forgotten: “First, allow universal school choice; second, expand free trade; third and most importantly, cut government spending.” That was long before Presidents Barack Obama and Joe Biden came along.
There are not too many problems in America that cannot be traced back to the growth of big and incompetent government.
It is notable that the two big bursts of inflation during modern times both occurred when government spending exploded. The first was the gigantic expansion of the LBJ “war on poverty” welfare state in the 1970s with prices nearly doubling, and then the post-COVID era spending blitz in the last year of Trump and then the Biden $6 trillion spending spree with the CPI sprinting from 1.5% to 9.1%.
Coincidence? Maybe. But I doubt it.
The connection between government flab and the decline in the purchasing power of the dollar is obvious. In both cases the Washington spending blitz was funded by Federal Reserve money printing. The helicopter money caused prices to surge. (I still find it laughable that 11 Nobel prize-winning economists wrote in the New York Times in 2021: Don’t worry, the Biden multi-trillion-dollar spending spree won’t cause inflation.)
The avalanche of federal spending hasn’t stopped even though COVID ended more than three years ago. We are three months into the 2025 fiscal year and on pace to spend an all-time high $7 trillion and borrow $2 trillion. If we stay on this course, the federal budget could reach $10 trillion over the next decade.
This road to financial perdition cannot stand. It risks blowing up the Trump presidency.
Upon entering office, Trump should on day one call for a package of up to $500 billion of rescissions — money that the last Congress appropriated but has not been spent yet. Cancelling the green energy subsidies alone could save nearly $100 billion. Why are we still spending money on COVID?
We could save tens of billions by ending corporate welfare programs — such as the wheel barrels full of tax dollars thrown at companies like Intel in the CHIPS Act. The Elon Musk Department of Government Efficiency is already identifying low hanging fruit that needs to be cut from the tree.
Along with extending the Trump tax cut of 2017, this erasure of bloated federal spending is critical for economic revival and for reversing the income losses to the middle class under Biden.
This is especially urgent because the curse of inflation is NOT over. Since the Fed started cutting interest rates in October, commodity prices are up nearly 5% and the mortgage rates have again hit 7% — in part because the combination of cheap money and government expansion is a toxic economic brew — as history teaches us.
Nothing could suck the oxygen and excitement out of the new Trump presidency more than a resumption of inflation at the grocery store and the gas pump. Trump’s record-high approval rating will sink overnight if the cost of everything starts rising again.
Cutting spending won’t be easy. The resistance won’t just come from Bernie Sanders Democrats. Trump will have to convince lawmakers in his own party — many of whom are already defending green-new-deal pork projects in their districts.
This is why Trump should make the case in his inaugural address that downsizing government is the moral equivalent of war. Borrow a line from Nancy Reagan: just say no — to runaway government spending. Say yes to what Friedman titled his famous book: “Capitalism and Freedom.”
Stephen Moore is a contributor to The Daily Caller News Foundation and a visiting fellow at the Heritage Foundation. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
Americans of all persuasions have reached a rough consensus in favor of cutting government spending. We all, with the possible exception of hard-left Democrats, know that our present course is unsustainable and will lead to fiscal ruin.
Yet so far, no politician in a position to do so has been able to accomplish the feat. Ronald Reagan’s heart was in the right place, but he wasn’t able to get a reluctant Congress to go along without giving up his dream of ending the Cold War.
Most presidents and congresses since have been MIA in fiscal discipline. Donald Trump, although successful in many policy initiatives, failed utterly in this most critical area of all.
But now there is suddenly hope arising from an unexpected quarter – Argentina. Javier Milei, their new president, has shown after one year that it is in fact possible to reduce the size and scope of the state. It takes clear vision and resolve, not just bluster and campaign slogans that melt under populist pressure to spend.
Milei’s political persona is brash and flamboyant. He sported a chainsaw during his presidential campaign to dramatize his zeal for cutting spending. But he is a serious economist, a former university professor who has published over 50 academic papers. He fully understands the relationship between free-market principles and economic growth.
He doesn’t pander. During his campaign, he was candid about the effect of the large cuts in spending he contemplated including the termination of tens of thousands of jobs, the elimination of government agencies, and the loss of regulatory protection many would experience.
Here’s the key. Unlike most politicians who make extravagant promises, he did what he said he would. The International Monetary Fund confirms that in his first year, he cut government spending by an astonishing 30%, he eliminated or downsized 12 government ministries, he canceled 80% of public infrastructure projects, and he reduced the public payroll by 20%.
The results already speak for themselves. Argentina has a balanced budget for the first time in 10 years. The first quarterly surplus appeared in April. Significantly, inflation has been reduced from an intolerable 25% monthly in 2023 to about 2% per month currently. Argentina’s credit ratings are starting to improve. Output is beginning to expand.
Once Argentina’s banks ceased printing money to cover chronic deficits, economic pain was bound to ensue. Massive debt is still out there. As Milei warned, unemployment is up and the poverty rate has jumped to nearly 50%.
Yet Argentines seem willing to stick with the program. The amazing drop in inflation (they have their money back) and the belief that the pain will be worth the gain seems to be keeping up morale. Milei’s approval rating is 55% and rising, with few signs of widespread discontent.
It helps that deregulation has already produced benefits. The Milei government has improved everyday life by slashing red tape around things like air travel, divorce, and satellite Internet. A housing boom has developed with rent deregulation. Rents have stabilized and mortgages are once again available. The poverty rate is already falling.
The left is not impressed, of course. Al-Jazeera calls Milei’s presidency a “disaster.” The BBC worries that he is “influencing” America’s new policy makers, asserting that “taking inspiration from Milei to reduce the size of government doesn’t make any sense.” The New York Times frets about the hardships being forced on Argentines.
The tantrum on the left is understandable. Argentina, once a wealthy nation, has been brought low by decades of autocratic, collectivist economic governance. Milei convinced voters that Argentina should not follow Cuba, Venezuela, and other failed economies down the “soak the rich” path.
He preached not more government but less, not more trade barriers but fewer, not higher taxes but lower. If Argentina succeeds, leftists have some serious explaining to do.
The incoming American administration seems interested in learning from Argentina’s experience. “The deficit was the root of all evils – without it, there’s no debt…no inflation,” Milei counsels.
There is no secret sauce either, just the basic sound economic principles that are the known roots of prosperity. We don’t need more study at this point, just the steely determination to do the right thing.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Kamala Harris in her nomination acceptance at the Democratic National Convention assured the roaring crowd that she would “never stop fighting” for the American people and that she would “blaze a new way forward.” The speech disclosed no details, but she appeared to have in mind merely adding to the benefits that the welfare state bestows on grateful voters.
Subsidies for home mortgages, forgiveness of student loans, and free universal preschool have been dangled as possibilities. However, Harris and the other purveyors of free stuff have a big problem. They are running out of other peoples’ money to give away.
It’s not just America but the world’s advanced economies who are seeing the bill come due for decades of social spending exceeding revenue. American leftists like to chide fiscal conservatives for fretting about high tax rates, but economists now note that some high-tax European states are approaching the peak of the Laffer curve, the point at which raising tax rates fails to raise additional revenues. That means hitting the wall.
Western politicians over the last century developed a different style of campaigning for office. Rather than emphasizing the common good and overall strength of the nation, they competed on the basis of what government services they could provide to individuals and groups.
The responses to the Great Depression and the COVID crisis were especially harmful. The New Deal failed to end the depression. We have WWII to thank for that. But the traumatic experience convinced many Americans to think of government as their benevolent caretaker.
The economic deprivations caused by the COVID crisis were due to mostly self-inflicted wounds like the economic and educational shutdowns. Worse, long after the crisis had passed, the checks kept coming to Americans who were not impoverished. The “emergency” expenditures morphed into entitlements.
America has developed a culture of spending which caused the national debt in 2023 to exceed 120% of GDP while 100% has long been considered the outer limit of acceptable indebtedness. We also have hundreds of trillions more in future obligations to beneficiaries with no funding source available.
Time and demographics are not on our side. In just the next 12 years, aging baby boomers will reduce the ratio of workers (25 to 64) to retirees (65 and older) from 3:1 to 2:1. The fastest growing demographic group is those 85 and older, who require extra funding. Moreover, increased security risks like war and terrorism will create additional budgetary stresses.
There are fewer alternatives to reduced spending than ever available. Tax increases are politically unpopular and often don’t produce the hoped for outcomes because they reduce productivity. European countries have about 50% higher tax revenues than America, yet their real GDP per capita is lower, even factoring in the government services and subsidies they receive.
The era of low interest rates and the accompanying “sugar high” is over. The higher cost of debt financing will inevitably impair the ability of succeeding generations, already tapped out, to shoulder the burden of our selfish spending.
By now, we’ve breezed past all the easy fixes. We are facing severe warning signals, and all the red lights are blinking. Yet in spite of the urgent need to change our ways, both political parties studiously look the other way. Getting elected is still the imperative that trumps all others.
The general accounting office (GAO) recently made recommendations for minor adjustments to federal government procedures that would save $208 billion over the next decade. The major one was equalizing payment rates for offices determining Medicare benefits. The proposals are non-controversial and politicians supporting them could take cover by pointing out that they are endorsed by a non-partisan agency. The response has been…crickets.
Scores of scholarly papers have been written on how to reduce government waste, how to expedite permitting, and how to recover COVID over-payments, all to no avail. The politicians just aren’t that interested and, sadly, neither is the public.
We’re hearing a lot about democracy lately. Both parties claim the other one is an existential threat. Advice to would-be political leaders who are courageous enough to go beyond pontificating and do something that might actually preserve our democracy is simply this: cut the spending.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
For the past three years, the people of Arizona have been forced to deal with the fallout of a struggling economy, rising prices, and an inflation rate that, at one point, was the highest in the country. With this in mind, Republicans got to work, delivering the largest tax cut in state history and following that up with a budget that included tax rebates for Arizona families.
But Governor Katie Hobbs clearly has much different priorities when it comes to your hard-earned money. True to her 10-year history of pulverizing Arizona taxpayers, Hobbs announced during her State of the State address in January her desire to—you guessed it—massively grow the size of state government. And judging by the executive staff hiring spree that Hobbs is on as governor, it’s clear that this isn’t just empty rhetoric…
