I will admit I did not take his (or Trump's, or the Republicans') talk about budget cuts seriously. Republicans have been demanding massive budget cuts since Ronald Reagan's day and not acting on them. Every time a Democrat is in the White House, Republicans freak out about excessive spending. As soon as Republicans are elected, they lose all interest in spending cuts until a Democrat is elected again. Then they bemoan their excessive spending in the last administration and vow to mend their ways, a vow that they stick to until the take the White House again.
I expected this time would be the same. When Elon Musk claimed that he would find $2 trillion in spending cuts, I thought one of three things would happen. Most likely, he would find the cuts were not so easy and lose interest. Next most likely -- he would find $200 billion in spending cuts and call it $2 trillion over ten years. This is a longstanding scam. Or maybe he would actually propose $2 trillion in spending cuts and be torn to pieces by the outraged mob. But it seemed unlikely.
I did not anticipate that he and a handful of merry minions would seize control of the treasury and start shutting off funds at will. I felt at least a small relief when Trump named his advisors that at least Michael Flynn was not among them. Now Flynn is apparently sorting through treasury records to decide which funds to cut off. No doubt others of similar ideological bent are also joining in.
When Donald Trump said he would use impoundment to refuse to spend any appropriations he disapproved of, I did not anticipate it would take place on a large scale for a simple reason. All spending has some sort of constituency. Invariably, the constituency hurt by spending cuts has a louder voice than the broader desire for spending cuts in the abstract. That is why spending cuts have always been so difficult to do.
The question is going to be how far Elon Musk takes it.
As of January 30 (Thursday), his target was $4 billion a day. He may be claiming to have "found" sufficient savings. Do the math. It comes to over $1.4 trillion dollars per year -- not that far short of his original $2 trillion goal. Current budget is about $6.75 trillion. That is roughly a 20% cut.
It gets worse. Taking Social Security and Medicare off the table (as Trump has made clear he wants to do), these two programs make about 40% of the budget. Taking the reduction only from the remaining 60%, would require 30% cuts to everything else. And then there is interest on the national debt. I have seen estimates from 13% to 17%. Take that off the table, and over half the budget is off limits, meaning that to achieve a 20% reduction, you would have to cut everything else by 40%. Alternately, Musk just might be crazy enough to default on the national debt, which would mean the end of the dollar as the world's reserve currency with unknown but almost certainly ruinous ramifications.
Look, I get that low information voters probably don't even know that Musk has seized control of the treasury. The idea that he is not elected, or confirmed by the Senate, or subject to the rules that control federal employees is too abstract to matter. Ditto any laws that Musk may be breaking. They may very well see the idea that our payments are being controlled by someone outside the government as a good thing. And the idea of disrupting the status quo and burning it all down is very appealing right now.
And if Musk limits himself to ending foreign aid and eliminating a few programs that seem too "woke," he may very well get aways with it. But if he attempts cuts on anything approaching the scale he is proposing, even the lowest information voters will notice -- and care. Political pressure will become overwhelming. At that point either Musk will back down and seek to maintain his position by reducing his cuts to a manageable level, or Trump will come under overwhelming pressure to remove Musk and his merry minions from the treasury -- by force if necessary.
Stay tuned.
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