Trump's epic betrayal of America's middle class

It was fitting that United States President Donald Trump was on the way to the Vatican when he came out with his country's Budget. Only a pope could hear a confession as egregious as Mr Trump's fiscal plan.

Pope Francis champions "social capitalism", a philosophy that values each member of society. Mr Trump's Budget would decimate support for America's poorest to fund a tax bonanza for its wealthiest. His Budget achieves balance through numerological voodoo. Rarely has a fiscal document relied on such dark accounting.

It is a blueprint for epic betrayal. Mr Trump's campaign was about helping the US middle classes. Now he wants to denude them of what cushion there is. In addition to the cuts for the needy, such as on food stamps, the Budget would wipe out higher education funding. Subsidies for those who cannot afford college loans would be eliminated. Tax incentives to encourage those on lower wages to stay in work - the highly effective earned income tax credit - would be heavily cut. Investment in research, job training, opioid treatment and scholarships would fall sharply. The only spending increases would come in the defence budget and for US-Mexico border security.

On top of that, Mr Trump's Budget commits the deadly sin of electoral suicide. The consolation is that he will find it hard to persuade his Republican colleagues to push most of it through.

That said, he has set the limits of America's economic agenda. It trades investment in people for Gatsby-scale windfalls. It sacrifices budgetary common sense for magical thinking. Most of all, it robs the federal government of the tools to address America's challenges.

Four of Mr Trump's departments - education, housing, energy and the Environmental Protection Agency - are headed by people who want to shut down the agencies they lead. The irony is that Mr Trump is laying the groundwork for a hundred more Trump insurgencies. Somewhere out there, another Trump lies in waiting. The next one will really drain the swamp. Believe me.

But Mr Trump's least forgivable sin is waste. Journalists experience the Trump presidency as a field day of leaks from an out-of-control operation. History will record it as an act of gross negligence.

Mr Trump was driven to victory by the anguish of middle America against the elites. It followed the longest period in US history of stagnant middle incomes. This included rising mortality rates for large swathes of middle America, and a collapse in morale of blue-collar males. Their most telling symptom is an addiction to painkillers. Mr Trump's success was the manifestation of a middle class that has lost faith in liberal democracy. It turns out he is offering a cure worse than the disease.

Mr Trump's success was the manifestation of a middle class that has lost faith in liberal democracy. It turns out he is offering a cure worse than the disease.

What will the fallout be? The first is that it will deepen the trench that spawned Mr Trump's victory. The two likeliest pieces of his agenda to go through are the tax cuts and the abolition of Obamacare. The first will shower society's winners with more gains. The second will deprive its losers of their most important safety net. Together, they will lead to a sharp deterioration in America's balance sheet.

Almost three-quarters of America's Budget now go to defence, debt interest payments and entitlements such as Social Security and Medicare. That is set to rise to more than 80 per cent in Mr Trump's term. The ratio that goes to investment in people, particularly in skills and education, will continue to shrink. America's Budget was already borrowing from tomorrow to pay off yesterday. Mr Trump would convert that into wholesale theft.

The second fallout is to America's democratic sanity. It was barely a quarter of a century ago that the US model triumphed over the Soviet Union's. That victory was delivered by a mixed economy that invested in America's middle classes. The Soviet threat brought out the best in enlightened capitalism.

Mr Trump's plans epitomise the amnesia that has befallen America's elites since then. Two decades of rising inequality have brought the US to the edge of democratic tolerance. Mr Trump is now testing its limits.

In one key sense the US system is working. Mr Trump's power is being checked and balanced. America's courts have blocked his plans to discriminate against Muslims. The media and civil society are doing a stellar job of shining a light on Mr Trump's blunders. A special prosecutor is investigating Mr Trump's alleged collusion with a foreign power. That is how it was designed to work.

In a larger sense, though, the system is failing. Mr Trump's victory was a sure sign of that. What he plans to do with it would be a greater failing still.


A version of this article appeared in the print edition of The Straits Times on May 26, 2017, with the headline 'Trump's epic betrayal of America's middle class'. Print Edition | Subscribe