Trump’s ‘Debt Bomb’: Deficit May Grow, Defense Budget May Not « Breaking Defense - Defense industry news, analysis and commentary: While the new president wants to grow the military, rebuild infrastructure, and cut taxes, Eaglen said, his plan to fund all that that through steep domestic spending cuts “is complete fantasy” that will never pass the Senate. (Any legislative path, even reconciliation, would require 60 votes). The only other way to pay is borrowing money — and “he’s mentioned many times on the campaign trail that’s he’s very comfortable leveraging debt.”
The result, said Eaglen, who’s close to most Republicans and defense hawks on the Hill, “will be a total bulldozing over the Tea Party,” which has seen the much-derided Budget Control Act (aka sequester) as a necessary limit on federal spending. The bulldozees-to-be in this scenario include Trump’s own pick for budget director, Rep. Rick Mulvaney, whose confirmation hearing before the Senate is tomorrow.
“I would not be surprised if they took the same approach that Reagan did,” said Mark Cancian of the Center for Strategic & International studies, speaking to me after the CSIS-hosted panel on which he and Eaglen both appeared. Ronald Reagan took office proposing defense increases and tax cuts, to be offset by economic growth and cuts to domestic spending, all very much like Trump. When Democrats blocked the domestic cuts, and the economic projections proved too optimistic — the so-called “Rosy Scenario” — the difference was made up by borrowing money, also known as creating big deficits.
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