The “economic policy in the United States…has involved a continuing effort by the government to find a mix of fiscal and monetary policies that will allow sustained growth and stable prices”. The fiscal policy of the United States is determined by the national government. Donald Trump, being our new President, has the power to propose such a budget to Congress, who will then revise, and approve the policy. This process is quite lengthy and could take nearly a year to complete. The fiscal policy is used to influence the pace of the economy, and stabilize prices and high employment rates. The fiscal policy is designed, by the president and Congress, to “determine the appropriate level of taxes and spending” in the economy. Since the 1930s, government spending has steadily increased. “Republicans typically favor lower taxes and smaller government”, and believe that “a steeply progressive rate structure discourages people from working and investing, and therefore hurts the overall economy”. They further argue that we are in need of a more uniform rate structure for everyone.
Donald Trump recently proposed a new fiscal policy, or budget, named “A New Foundation for American Greatness,” in which he discussed what went wrong in the last presidency and what he intends to do to bring our economy success. His proposed budget is “pro-growth”, and aims to lower corporate taxes and streamline regulation.
In the budget message of the president, Trump explains numerous pillars of reform that are needed to replace our current economic standing. These include: health reform, tax reform and simplification, immigration reform, reductions in federal spending, regulatory rollback, American energy development, and welfare reform. President Trump feels that Americans need to have the ability to purchase affordable healthcare, and in order to do so he must repeal Obamacare. Businesses and workers should be exempt of their tax burdens in order to support economic growth. In order to better serve American workers and lower taxes, as well as provide federal funding for disadvantaged citizens, President Trump feels that the current immigrations policy should be changed. This would also serve to help underpriviledged people. As part of President Trump’s policy, there is going to be a better check on the expenditures of the federal government. President Trump also indicated that federal regulations should be updated so that there is a surplus of job opportunities which is necessary to reduce unemployment. In order to reduce the price of electricity as well as transportation fuels, President Trump proposes that new energy sources be explored. This would reduce the price of consumer goods so that Americans have more money to save and invest. President Trump feels that this would provide “greater security for the American people”. Regarding the welfare system, President Trump feels that welfare money should be available to individuals who really need it and are more deserving of it.
Since safety and security are a top priority, federal spending should be redirected, as noted in President Trump’s new budget. He proposes, “[the budget] includes $639 billion for the Department of Defense—a $52 billion increase from the 2017 annualized continuing resolution level”(BUDGET). The budget aims to increase funding to help limit, and eventually terminate altogether, illegal immigration. The funding will also include the building of a security wall, as part of an initiative to reduce crime and drug distribution.
When President Trump was elected as President, he also inherited a $20 million deficit. One of the main reasons for the large budget deficit is entitlements. This is a “slippery slope” because cutting back on entitlements is very unpopular and gets very little backing from Congress. For example, healthcare reform can save $1 trillion over the next 10 years, and is something that President Trump has been working on (WT), yet it is being highly resisted by Congress. President Trump is now keeping a lot of his campaign promises, and wants to downsize useless government spending, cut taxes, and persuade businesses to hire more employees, thus reducing unemployment and increasing tax revenues. President Trump wants to initiate fiscal policies that represent more personal responsibilities that have a proven track record that he knows will work. While maintaining central services, he is trying to reduce the budget and serve the needs of the American people. “This is a budget plan that will surgically remove trillions of dollars of wasteful spending from the obese $4 trillion federal deficit. Many agencies will have to live with cuts of 5, 10, and 30 percent while other outdated, duplicative or unproductive programs will go to the graveyard” (wt).
Since the budget will promote economic prosperity, it will allow funding for new initiatives, such as infrastructure and paid parental leave. The administration is working very hard to provide incentives for hardworking families who have been ignored for far too long. Many of these aspirations are within reach. The new budget will provide a huge increase in funding to the defense department. The increase will stem from reductions in other areas. Increasing defense spending to modernize our armed forces will keep America with a predominant fighting force as well as keep peace between nations. In addition, President Trump seeks to provide more funding for veterans affairs. The President wants a new foundation for American greatness, hence naming his new fiscal policy, A New Foundation for American Greatness.
The major steps in the President’s budget to improve the economy and balance the economy include the following: control federal spending, simplify a tax code and provide tax relief, provide a comprehensive plan to reform the federal government and reduce the federal civilian workforce, and roll back burdensome regulations. As previously stated the $3.6 million The first step in controlling federal spending is to repeal and replace Obamacare. The President wants to protect Americans from the failures of Obamacare by lowering premiums and expanding options. This should improve medicaids sustainability. He also plans to increase Medicaid sustainability (GREAT). Americans can purchase coverage with the use of tax credits and health savings accounts. By repealing Obamacare and its regulations, businesses can now increase their employment, thus increasing the GDP, and allowing more economic growth. By providing needed flexibility, to healthy consumers, so they may enroll in insurance coverage, this brings stability to the risk pool while increasing the options for patients and providers. To create a free and open healthcare market, the administration supports state flexibility to make decisions that work best for their individual markets. The budget promotes efficiency and funds critical activities for the health exchanges. However Congress refused to vote in his proposal.
President Trump plans to implement changes to the National Institute of Health (NIH), to improve efficiency for research enterprises, supporting the highest priority biomedical research and development.
A path must be created to encourage individuals on welfare to seek employment. Trump plans to implement a series of reforms that close eligibility loopholes and target the people most in need and encourage the able-bodied to work. The proposals include strengthening child support programs, and providing state agencies the ability to be more efficient and support responsible parenthood. Mechanisms will be encouraged to replace aging information technology systems, increasing efficiency and integrity to the welfare program. This proposal would provide authorization to workers who are eligible to work in the United States, and refuse authorization to undocumented individuals. These reform initiatives would help to streamline the system, make it more efficient and provide the necessary services for the people to whom the programs were intended.
Companies have been providing less compensation in the form of retirement benefits but yet the federal government continues to offer retirement benefits far better than these companies. Adjustments must be made to equalize the retirement benefits offered by the government as compared to the private sector since these entitlements are a drain on the federal budget. New initiatives will have employees paying the same amount as the employing agency. This will benefit the employees and reduce the strain on the federal budget.
The budget prioritizes the improper amount of cash outlays. Improper payments have been a huge drain on the federal budget. This will be scrutinized closely in an effort to reduce the deficit. In addition, the budget blueprint prioritizes federal spending so that it ensures the safety and security of the American people. Includes in this is an increase in defense spending and reduction in non-defense programs.
The budget intends to reduce direct funding for programs and organizations whose missions do not reflect United States foreign policy. This includes the United States share of spending at the United Nations. Currently, the United States is paying more than its fair share in these international agencies. The mission is to ensure the best use of American taxpayer dollars, so that we can advance national security and promote a peaceful world.
One of the biggest objectives of the new administration is to simplify the tax code while providing tax relief, especially to middle income families, that would be provided by a more efficient tax system. Our present tax system is outdated and overly complex. The system must be updated to unleash the American economy and create thousands of new jobs. The budget will assume a deficit neutral tax position so that our children and grandchildren will no longer be burdened with such an immense deficit.
American taxpayers need a regulatory system that works to their benefit. Year after year, federal agencies create new regulations that hamper consumers and businesses alike. The President plans to eliminate these unnecessary regulations to make easier for large and small businesses to function without hampering their growth.
The new administration has inherited a complex system with many faults and an immense deficit. The present fiscal system is broken and it is a monumental task to make the system work for everyone while decrease the deficit and providing safety and security for the American taxpayers. President Trumps, “New Foundation for Greatness”, provides fiscal policy actions that will help “Making America Great Again.”