Trump’s budget is a CEO’s budget. That’s a good thing.
(This post originally appeared on The Washington Post)
Seems like most people are hating President Trump’s proposed budget. That’s how you know it’s doing its job.
Other than the military — which is looking at a $600 billion spending increase — the president is pretty much cutting costs across the board. This should be no surprise. This is a chief executive’s budget. Budgets are meant to constrain and enforce discipline in an organization. They’re supposed to challenge managers to reach their goals with as few resources as possible. It’s meant to provide funding for the company’s priorities and not to spend money on things that aren’t as important. That’s exactly what this budget is doing.
I’ve seen this before. So has anyone who runs a business. People don’t like to have their budgets cut. No one wants to have their goals limited. Everyone has their agenda and everyone has a genuine reason their department, their division, their group is vital to the company’s future.
So when educators hear that the funding for certain teacher training and after-school programs is part of the $9.2 billion in proposed cuts to the Department of Education, they’re understandably upset. When those concerned about climate change read that the president is axing scientific research in this area they’re outraged. When environmentalists find that the budget for the Department of the Interior is being decreased by more than 10 percent, they’re up in arms. The president’s proposals are panicking the diplomatic community, which is facing significant cuts in foreign aid and humanitarian assistance. It is upsetting the farming industry, community organizers and supporters of funding for increased health care, welfare and food stamps.
These opponents, like any department head in a company, have good reasons to be upset. So they question the leader’s logic. They point out potential mathematical errors in the spreadsheet. They scoff at the over-optimistic revenue (in this case, growth) assumptions. They fight and they shake their heads in wonder how their CEO (or in this case, president) can be so ignorant as to not give priority to the issues that deserve it the most … their issues. These managers wouldn’t be doing their jobs otherwise.
For years, I’ve had clients, readers and countless business executives scratch their heads at the decisions that governments make and say to me: “We wouldn’t run a business the way this government is run.” Yes, it’s true that there are many differences between running a government and running a business. But the runaway spending and alarming increase in our nation’s debt is of grave concern to the business community. Some economists have said that our national debt, whether it’s $19 trillion or $29 trillion, can be managed like a mortgage — as long as the government is able to service it. But who really knows where that “service” limit is? Do we really want to find out? Do we want to risk the fates of other countries that have bankrupted themselves under the weight of unserviceable commitments and entitlement programs? No business leader would take this risk. Instead, they — like President Trump — would have a plan for balancing their budgets. A plan that would require some hard choices.
Of course, no budget is perfect — and this one has many flaws. Some deficit hawks say it’s not doing enough to address entitlement spending like Social Security and Medicare. Others are dubious that tax cuts will fuel growth, or that growth will ever reach the projected levels (3 percent) necessary to make things balance. A few are annoyed that the president has included funding for some of his pet projects like the Mexican wall and daughter Ivanka’s plan for paid parental leave. But this is just a first offer. There are months of congressional reconciliation and negotiation ahead of us and Congress isn’t bound to abide by all of the president’s proposals. It’s unlikely it will.
President Trump is saying to the American people what any business leader would say to their managers and employees: We can’t afford all this stuff. It would great to have unlimited health care, gleaming infrastructure, military security, top-notch education and food and housing for everyone who needs it, while also helping out those in need in other parts of the world. But that’s just not reality. No business, no government — not even America — has a blank check to afford all the wonderful things we wish we had. Can you?