Trump's Proposed Budget Is Expected To Include Spending Cuts
STEVE INSKEEP, HOST:
We do not yet have President Trump's budget proposal in front of us. We have heard some details of it, and we will discuss them now with Russell Vought. He is acting director of the president's Office of Management and Budget. His office draws up a plan that may never become law - because Congress decides that - but it declares the president's priorities as budget negotiations begin. Mr. Vought, welcome to the program.
RUSSELL VOUGHT: Thanks for having me.
INSKEEP: And since you're on this program for the first time, I'll just mention for people that you worked for Heritage Action, which was a conservative group. Now - and before that, for Republicans in Congress. Now you work for the president. The Wall Street Journal first reported and NPR has confirmed that the president wants big cuts in spending, which the president has proposed in past years and Congress has ignored in past years. Have you laid any groundwork for a different reception this time?
VOUGHT: Well, we hope so. Our view is that we have trillion-dollar deficits as far as the eye can see, and we have to take care of our deficits and get those numbers down. That's why this president has proposed $4.6 trillion in deficit reduction and more than any president in history. We would balance the budget in 15 years.
But you are right. We have not been able to make progress - not because this president has not put forward proposals, but because Democrats in Congress have opposed his previous budgets. We - you know, we hope that changes. We probably need to have a national election before it does. But we're going to continue to put forward budgets that balance and to propose eliminating waste where we possibly can.
INSKEEP: Aren't those trillion-dollar deficits largely because the president favored tax cuts and also promised 3% annual growth, which hasn't quite happened?
VOUGHT: You know, we believe in the short-term, deficits have been impacted. But over the 10-year period, the economic agenda of this president will be - will pay for the costs of the tax cut. If you look at where debt as a percentage of GDP was for fiscal year '21 projected to be coming into this administration, it's roughly the same.
We need to get the economy continuing to grow. It's growing great right now. The idea that we're ever going to tackle deficits with a stagnant economy is just not something that's within the realm of possibility. And we saw that under the Obama administration, where he increased taxes, and it led to $3 trillion losses in revenues.
INSKEEP: Do you - well, if I can. I mean, the tax cuts actually helped to reduce the deficit during the president's - President Obama's time. Are you still forecasting 3% growth as you look toward shrinking the deficit over time?
VOUGHT: As you know, this is a post-policy budget. So unlike the forecasting, this assumes the enactment of our policies - like infrastructure, deregulatory initiatives, better trade deals. So, yes, we continue to forecast a 3% economic growth. In terms of this year, we think it'll rebound to about 2.8%, go up to 3% from here on out into the window.
INSKEEP: Even though that hasn't happened yet during the Trump administration.
VOUGHT: We came very close in one of the years. We have, you know, experienced some dips in this last year as a result of things that - like the GM strike and the Boeing downing of the plane, of the...
INSKEEP: 737 Maxes, right.
VOUGHT: The 737 Max. So those impact economic growth, for sure. But we believe that our policies will get us back up to the high levels of 3% growth into the future.
INSKEEP: Mr. Vought, my colleagues at NPR have confirmed that this proposal includes a 21% cut in foreign aid. I know that a lot of Americans are not fans of foreign aid, so I understand the politics. However, we're at a moment when the United States is competing for influence with China around the world. China is spending a lot of money, and the president is certainly focused on China. So what makes this a good moment for the United States to back away from its own efforts to influence the world?
VOUGHT: Because we're tripling funding for the Development Finance Corporation, which is the key agency that we have decided is going to be the ability to counter adversaries across the globe. But that doesn't mean we can't eliminate waste in foreign aid. For instance, we need to get rid of funding like the Bob Dylan statue in Mozambique or the NASA space camp in Pakistan or the professional cricket league in Afghanistan. There is waste across the globe the taxpayers are funding, and that doesn't mean that we can't do both.
INSKEEP: Those things sound kind of bad, but 21% of foreign aid is wasted, really?
VOUGHT: We believe 21% is something that we can absorb in terms of a reduction and still provide very, very generous levels of aid across the globe. For instance, this would have the second-highest levels of humanitarian aid of any year based on the high levels of carryover. So this is still a generous budget, but it is one that is fiscally responsible.
INSKEEP: Is the president proposing a cut in foreign aid because it does sound good to some voters and then counting on Congress to do the hard work of putting the money back in, which they have done in the past?
VOUGHT: No, I don't - I think you can rest assure that the president actually wants to cut foreign aid and is not doing this just so Congress can reject him.
INSKEEP: Mr. Vought, The Wall Street Journal is reporting that the president wants to save money through changes to Medicare prescription drug pricing. How would that work?
VOUGHT: Yeah. He has led on this from Day 1. We have $135 billion in savings within the Medicare program for lower prescription drugs. We have less specificity this year than years past, but there's a reason for that. In years past, we had very detailed proposals like lowering generics or increasing the number of generics to market, removing some of the disincentives in the Medicare program that lead drug plans to increase costs.
This year, there's a debate going on. The Democrats have passed a bill; Senate Republicans are working on a bill. We want to be able to have a bill get to his desk, and so we've left it a little bit more vague to give the legislative process as much flexibility to get something done this year.
INSKEEP: If the government pays less, presumably someone pays more. Can you tell us who, in your aspiration here at least, would be paying more? Is it drug companies? Is it consumers? Who?
VOUGHT: Well, certainly there would be an impact on the pharmaceutical industry's bottom line. But we don't believe that this is something that would impact innovation in any way. That's one of our problems with the House bill, actually, is that the way that they've gone about this debate is to actually hurt innovation and lead to one-third fewer innovative drugs over the next 10 years. So that's something we reject. We've opposed it. But we do want this debate to be had. We think Senator Grassley has a lot of good ideas coming out of the Senate Finance Committee. And so this administration is very supportive of getting a bill done.
INSKEEP: Can I ask one more question, Mr. Vought? And it has to do with eligibility for disability benefits, which many people get in this country. The Wall Street Journal reports that you would like to tighten eligibility access to disability. And that's a big deal in a lot of older, industrial red states, frankly, like West Virginia, Alabama, Arkansas, Kentucky, Mississippi. Those are the states with really high rates of people on disability. What's going wrong that you're trying to address?
VOUGHT: Couple of things. We - there's about $7 billion in improper payments in the program, so we obviously want to root those out. But in general, we want to get people back to work in the labor force. So to the extent that you can get a job in the national economy, we want to have incentives that allow us to do that and help get people back to work. You know, right now, the inability to speak English is a qualifying factor that allow you to get disability. We think that's not how the program was meant to work, and so that's an example of one of the reforms that we have within the disability program.
INSKEEP: Oh, now, that's interesting because I guess that would affect the number of immigrants that got disability but would not affect a lot of white voters in eastern Kentucky, just to pick a group of people who supported the president.
VOUGHT: Well, I think that's putting a little bit of politics into it. That's not how we're developing these proposals. We're trying to get people back to work. We want to have ongoing disability reviews. Instead of having a disability review every seven years, we want you to have it every two or three years. Again, that would apply broadly. And so these are kind of common-sense good government reforms.
INSKEEP: Meaning that even in Alabama, say, there's going to be people facing more reviews in order to get those disability benefits more often.
VOUGHT: It would apply across the country, for sure.
INSKEEP: Mr. Vought, thanks very much for your time.
VOUGHT: All right. Thank you.
INSKEEP: Russell Vought is the president's acting director of the Office of Management and Budget.
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