Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

GOP Spending Cuts Too Small

by February 18, 2025
February 18, 2025
GOP Spending Cuts Too Small

Chris Edwards

Republicans criticized President Biden for his huge spending and deficits, which spurred inflation and jacked up debt to dangerously high levels. The GOP are now in the driver’s seat and must reform the budget to ward off a fiscal crisis. Inflation is ticking up, borrowing costs are rising, and annual interest spending is now so huge it surpasses defense spending.

Last week, the House Budget Committee released a plan to extend the Trump tax cuts, boost spending on defense and security, and trim other spending. But the plan would make the government’s debt crisis worse! Debt held by the public would rise from $30 trillion in 2025 to $54 trillion by 2034. That huge 2034 debt load would be even larger than the $50 trillion in baseline debt projected by the Congressional Budget Office.

Many Republicans are not grasping the seriousness of the coming fiscal crunch. Relative to the size of the economy, reckless spending since 2001 has pushed federal debt to almost the peak reached during World War Two. The debt fell after the war, but today it is spiraling upwards even with steady economic growth and without a war.

With control of the House and Senate, now is the time for Republicans to cut. They should eliminate dozens of agencies that spend on activities that should be handled by the states or the private sector. President Trump appears open to major reforms, including abolishing the Department of Education. Congress should jump on the opportunity and deliver major downsizing legislation to the president’s desk.

How much should Republicans cut? The chart shows possible 2034 debt targets measured as a percentage of gross domestic product (GDP). A good target would be to cut spending enough to stabilize debt at the current 100 percent of GDP, which would avert a debt crisis.

Another goal would be to limit debt to no more than the CBO baseline. But in that case, we would still be on an unsustainable path with debt rising to 117 percent of GDP by 2034. 

Remarkably, the House Budget Committee chose a path of even larger debt growth than the CBO baseline, thus hastening the coming fiscal crisis. The plan would cut taxes by $4.5 trillion by 2034, increase defense and security spending by $300 billion, and cut other spending by a paltry $1.5 trillion. The net effect would be to boost the debt to 126 percent of GDP by 2034.

Without any law changes, total spending over the next 10 years (2025–2034) is projected to be $86 trillion. The GOP plan to cut spending by $1.5 trillion would be just a two percent cut. That would be pathetic, weak, and nowhere near enough to meet the nation’s massive fiscal challenge.

Americans voted for Republicans to tackle overspending, debt, and inflation. This year, Republicans can pass major spending cuts with majorities in the House and Senate. They have a supportive president in Trump and the tailwind provided by his DOGE initiative. Republicans must seize the moment.

Cato scholars examine the House and Senate budget plans here and here and propose major budget reforms here.

0
FacebookTwitterGoogle +Pinterest
previous post
How to Decarbonise Your Fleet
next post
Investors pull back from UK as economic gloom deepens

You may also like

Professional Development Classes Aren’t Government Speech

September 12, 2024

New Year, New AI Policy?

January 14, 2025

Dear EPA: Go Back to the Drawing Board

December 21, 2023

Update: DOJ Jumps the Shark

February 14, 2025

Milking the System: The Problem with Licensing Lactation...

December 10, 2024

Friday Feature: Trinity Arch Preparatory School

March 15, 2024

New Essay: Public Health as If People Mattered

March 18, 2025

FDIC Vice Chairman Travis Hill to Visit Cato...

September 18, 2023

Local Government Corruption: 15 Case Studies

June 3, 2025

FDA Delays Patients Access to a New Alzheimer’s...

March 8, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • HMRC inheritance tax investigations surge 37% as treasury seeks to plug revenue gap

      June 9, 2025
    • Believ secures £300m to roll out 30,000 public EV charge points across the UK

      June 9, 2025
    • US and China hold London talks to ease trade war tensions

      June 9, 2025
    • British fathers urged to join landmark ‘dad strike’ over poor paternity leave

      June 9, 2025
    • IVF parents should have right to paid fertility leave, says GMB union

      June 9, 2025
    • Reform UK clashes with Bank of England over interest payments to lenders

      June 9, 2025

    Categories

    • Business (8,158)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved