- - Tuesday, February 11, 2020

Managing money is a fundamental skill, but Washington is a slow learner. Without a healthy respect for the perils of overspending, an irresistible temptation lurks to wear out the Treasury’s credit card. As the nation stands at a fiscal crossroad, President Trump has signaled a desire to part ways with the past and choose the often-neglected road to financial sustainability. The alternative route leads to ruin.

The president’s budget blueprint, released Monday, holds the line on spending at $4.8 trillion for fiscal 2021 and makes a good-faith stab at carving out a pathway back to a more secure economic future. “When we take hold of our freedom, and take our destiny in our hands, we choose to reject a future of American decline. My 2021 Budget sets the course for a future of continued American dominance and prosperity,” wrote Mr. Trump in an accompanying statement.

By trimming $4.4 trillion in spending over the next 15 years, the federal government would achieve a surplus for the first time since 2000, according to forecasters in the Office of Management and Budget (OMB), who assume, perhaps optimistically, an annual gross domestic product (GDP) growth rate of 3 percent. “We believe we can make a big dent and get back in the realm of fiscal responsibility,” OMB acting director Russell Vought told CNBC.

The president’s budget proposal calls for reductions to a raft of programs and agencies, adding up to 5 percent less money for nondefense discretionary programs. Among the markdowns are a 48 percent cut to appropriations for the Commerce Department, a 22 percent cut to the Department of State and the U.S. Agency for International Development, 15 percent less for the Department of Housing and Urban Development, a 10 percent trim to the Department of Health and Human Services, a 9 percent reduction for the Centers for Disease Control and Prevention, 8 percent less for the Department of Energy, and a 2.3 percent haircut for the Department of Justice.

Even during times of relative political accord in Washington, struggles over pieces of the fiscal pie bring out the sharpest knives. On the heels of their failed impeachment campaign, Democrats are in no mood for budget bipartisanship. “The budget is a statement of values, and once again the president is showing just how little he values the good health, financial security and well-being of hard-working American families,” said House Speaker Nancy Pelosi.

There is little in the president’s budget plan, though, to trigger the speaker’s wrath over the treatment of Middle America: Medicare is slated to garner 6 percent in higher spending, Medicaid an additional 3 percent and Veterans Affairs would get an additional 14 percent. In contrast, the Department of Defense stands to receive only a slight, 0.8 percent spending boost.

Annual deficits have persisted during Mr. Trump’s first three years in office, reaching the embarrassing $1 trillion mark and pushing the national debt above a nearly unfathomable $23 trillion. The shame must be shared by the president’s spending rivals in Congress. Democrats and Republicans alike have squeezed him for more domestic spending in exchange for much-needed money for revamping a military depleted by a generation of persistent Middle East warfare.

Congress mustn’t give into its habit of shoving the nation farther in the direction of financial mishap. The Congressional Budget Office (CBO) laid out the dreadful consequences of continued overspending in a report released Jan. 28 and titled, “The Budget and Economic Outlook: 2020-2030.” Based on current budget trends, the CBO projects a budget deficit of $1.0 trillion this year and deficits averaging $1.3 trillion a year until 2030.

The CBO forecasts the nation’s GDP to grow by a respectable 2.2 percent over the course of 2020, but slump during the next decade to an average of 1.7 percent a year. If those projections prove accurate, the annual deficit would reach $30.4 trillion by 2030. At 98 percent of GDP, the nation’s debt would eclipse its all-time record, posted at the conclusion of World War II. Beyond lies new borrowing just to pay interest, the insolvency scenario.

The green-eyeshade number-crunchers have warned the president that the nation’s current financial course is the road to ruin. His fiscal 2021 budget demonstrates he is listening. Congress must heed the alarm as well and join the switch to the alternative route that leads to fiscal safety.

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