The biggest challenge for this administration to wean the government off the ridiculous spending spree that it has been on. The Biden administration was spending money like the proverbial drunken sailor. I believe their intent was to collapse the economy so that most people would have to rely on the government for their very existence.
How will this administration rein in the deficit? Reducing the federal work force will certainly help in that area. There has already been some effect. When the severance package runs out in September, there should be another dip in federal spending. Now that the Supreme Court has cleared the way for the Executive branch to begin downsizing the Department of Education, there should be another dip in spending. Other downsizing efforts should see less problems with moving forward.
The Big Beautiful Bill did contain a small spending increase in order to get it passed. However, the tax cuts should yield more in tax revenue than most economists are willing to admit. We saw this during Trump 1.0 when the roaring economy caused tax collections to soar.
How is the deficit five months into Trump 2.0? As it turns out, there has already been a stunning one third drop in the deficit.
First 5 months of Trump Presidency. Total deficit $498 billion. Same five months in last year of Biden Presidency the deficit was $741 billion. pic.twitter.com/h28H5yBCi1
— Brian Wesbury (@wesbury) July 14, 2025
If one looks carefully, one can see that there is an almost $100 billion difference on June ($70 billion shortfall vs a $27 billion surplus). Over the five months in question, the deficit has come down from $741 Billion to $498 billion. Still way too much but certainly headed in a good direction.
The economics here are very positive. Now Congress needs to get going on a rescissions package that actually slashes bloated and corrupt government agencies. The recommended DOGE cuts need to happen. How many Republicans will stand in the way due to personal reasons?