The $22 Trillion Problem

It's Impossible to Balance the Budget Without Modernizing Social Security, Medicare, and Medicaid

During Trump’s address to a joint session of Congress on Tuesday, he made a very bold statement. He said, “[I]n the near future, I want to do what has not been done in 24 years: balance the federal budget. We are going to balance it.”

Good luck.

Admittedly, Trump has been all over the place on cuts to Medicare and Social Security. He ran in 2016 on a promise not to touch the programs. He opened the door in 2024 before quickly shutting it. So, it shouldn’t come as a surprise that the statement he made in his joint address isn’t really worth much of anything.

Over the next ten years, from FY 2026 through FY 2035, the federal government is projected to spend $89.306 trillion, according to the Congressional Budget Office. It will take in $67.548 trillion in revenue. That’s under current law, which assumes the Tax Cuts and Jobs Act isn’t extended. That leaves a $21.758 trillion hole. That’s the cumulative deficit over the next ten years.

It’s impossible to achieve nearly $22 trillion in cuts over the next ten years by eliminating “waste, fraud, and abuse.” The entirity of discretionary spending over the next ten years is $21.090 trillion. That includes defense spending. Take defense off the table, and you’re looking at $11.529 trillion in nondefense spending. That’s not nearly enough to balance the budget.

It’s impossible to balance the budget without modernizing Medicare and Social Security. The suggestion otherwise isn’t worth a response. The math just doesn’t work.

Look, Social Security, Medicare, Medicaid, defense, and net interest on the share of the debt held by the public are nearly 75 percent of all federal outlays over the next ten years. On the low end, these programs are 71.8 percent in FY 2026 but will rise to just under 78 percent in FY 2035. Only one of those categories is discretionary, and that’s defense. Everything else is baked in the budgetary cake. Those categories are on autopilot.

It’s impossible to balance the budget unless Trump and Congress are willing to modernize Social Security, Medicare, and Medicaid, as well as eliminate waste and redundancies in defense spending. If those monumental tasks are undertaken, outlays for net interest will begin to decline.

The thing is, though, Trump and Congress can’t accomplish this by going at it alone. They’ll need Democratic support. Why? Well, first, Social Security is statutorily excluded from budget reconciliation. Second, for this effort to have any credibility and to reduce political exposure, the effort has to be bipartisan to have credibility with the American people. That will come with some tough decisions that Republicans won’t like, but no one will get everything they want in this effort. Finally, Americans need to see that Congress can work together to solve significant problems like this.

As of today, DOGE claims $105 billion in savings. What DOGE is doing right now–and it’s unclear how much of those savings are actually real–doesn’t come close to scratching the surface of federal spending. The deficit over the next ten years is projected to be $21.758 trillion. That’s not to say that identifying wasteful spending is a bad thing. Without question, we need to cut waste out of federal spending, but I would dispute the notion that everything DOGE has found is necessarily waste or, as Trump likes to say, “fraud.”

The way it’s being done is also highly problematic because the Impoundment Control Act makes very clear that the administration has to submit rescissions to Congress to eliminate spending. Look at it this way. Every single penny that DOGE has supposedly eliminated may be renewed if Congress passes another continuing resolution on or before March 14. The money is still there. Congress has to act for it to be lasting.

Even then, DOGE is barely scratching the surface, and it can’t touch the drivers of federal spending, deficits, and debt. Only Congress can do that, and until lawmakers begin to take our perilous fiscal situation seriously, there won’t be a balanced budget.