Tags: David Stockman | Welfare | Trump | Budget

David Stockman: Welfare in US Is Running Rampant

James Steidl/DreamsTime

By    |   Tuesday, 23 May 2017 01:23 PM

Former Reagan Budget Director David Stockman has urged President Donald Trump and all Washington lawmakers of both parties to properly manage welfare in the U.S.

President Donald Trump plans $1.7 trillion in cuts to a category of government spending that includes major social and entitlement programs for lower-income Americans, as part of an effort to balance the budget within a decade.

The White House's formal budget request includes $274 billion in cuts over 10 years to means-tested anti-poverty programs, including food stamps, Bloomberg reported.

Trump is proposing to cut $193 billion from the Supplemental Nutrition Assistance Program, commonly known as food stamps, over the next decade. The cuts, which would amount to an approximate 25 percent reduction, would be achieved in part by limiting eligibility for food stamps and by requiring work, according to the document.

Spending on the Earned Income Tax Credit and Child Tax Credit would also be reduced by $40 billion, in part by requiring proof that recipients are authorized to work in the U.S. Traditional welfare payments, known as Temporary Assistance for Needy Families, would be cut by $21 billion.

However, Stockman has pronounced Trump's budget blueprint as “dead before arrival.”

“Unfortunately this budget will be dead before arrival because all of these cuts I left in the vault at OMB [Office of Management and Budget] 36 years ago, they were rejected then… I would make the cuts myself philosophically, but there are no votes for them,” Stockman said on “Cavuto Coast to Coast.”

Stockman contends the federal government shouldn’t be in control of welfare programs.

“It’s ‘welfarism’ run rampant and it’s never going to be solved from Washington because Washington is the swamp filled with lobbies of every kind and they always win. I say put it in a giant block grant, send it back to the states," said Stockman, who was the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

"It’s the only way we are going to avoid national bankruptcy, is to bring the states back into a competitive ballgame,” said Stockman, who served as a Republican U.S. Representative from the state of Michigan (1977–1981).

Stockman explained how the federal government can transfer the control of welfare programs to the states.

“I say put $600 billion worth of welfare or means tested programs, Medicaid, food stamps, cash assistance, SSI and so forth in one big block grant, send it back to the states… The [states] have to balance it by their constitution. It’s one block grant and we cut it by 5 percent a year for the next 20 years,” he said.

For his part, Nobel Prize-winning economist Angus Deaton said Trump's economic policies risk creating growth that mostly benefits the rich and aggravates income inequality in the United States.

Trump was swept to power on promises of help for poorer Americans but Deaton said his proposals to roll back regulations on finance and industry and cut healthcare benefits would mostly help corporate groups with political influence.

Trump's plans to cut taxes and raise trade barriers, if enacted, might give a short-term income boost to some workers but would not deliver the long-term growth that is essential for mitigating the effects of inequality, he said in an interview, Reuters reported.

"I don't think any of it is good" for addressing income inequality, said Deaton, a Princeton University professor, who won the Nobel Prize for economics in 2015 for his work on poverty, welfare and consumption.

However, Newsmax Finance Insider Stephen Moore takes issue with such narrow-minded thinking.

"The naysayers are dead wrong. Start with the tax plan that Larry Kudlow and now-Treasury Secretary Steven Mnuchin and I put together for Donald Trump during the campaign," Moore wrote in his blog.

"That plan cuts U.S. business taxes from 35 percent (the highest in the world) to 15 percent (which would be among the lowest rates in the world). This will lure more jobs and businesses back to the United States. Apple CEO Tim Cook says the Trump tax plan could bring $250 billion of Apple profits back to these shores, where it can be reinvested in Michigan, Ohio, California and so on rather than Ireland, China or Europe," Moore wrote.

"The plan also simplifies the tax system and cuts the taxes of 26 million small businesses, which create about two-thirds of the new jobs in America. Without healthy, prosperous employers, you can't have healthy, well-paying jobs," Moore wrote.

"This alone can boost economic growth by as much as 1 percentage point per year and will generate about $3 trillion more tax revenue over the next decade," wrote Moore, a distinguished visiting fellow at The Heritage Foundation.

(Newsmax wires services contributed to this report).

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Former Reagan Budget Director David Stockman has urged President Donald Trump and all Washington lawmakers of both parties to properly manage welfare in the U.S.
David Stockman, Welfare, Trump, Budget
Tuesday, 23 May 2017 01:23 PM
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