Economists debate Rick Scott’s assertion the federal budget should be ‘half its size’

Rick Scott has been consistent on the campaign trail this year, and even since he’s been in the Senate, that the federal government spends too much money.

But could the country still be run efficiently if all federal spending was reduced in half? That’s what the Florida Republican postulated last week in Milwaukee.

Speaking on the “The Clay Travis and Buck Sexton” show, the senator, running for a second term, said, “The number one thing that we have to do is downsize the size of government. The government’s way too big.”

“The federal government probably needs to be half its size,” he added.

The federal government spent $6.1 trillion in 2023, according to the Congressional Budget Office, meaning the cuts Scott is talking about would bring federal spending down to $3.05 trillion. Economists note that with interest payments of $659 billion last year required to avert a government default, the proposed spending rate would be reduced to $2.39 trillion annually.

The Phoenix reached out to three economists to get their interpretation of whether the senator’s plan would work, without raising taxes.

“If you tried to cut the government 50% but not touch Medicare or Social Security, you literally couldn’t do it,” said Bobby Kogan, senior director of federal budget policy at the liberal-leaning Center for American Progress. “The math doesn’t work. And so, if you were really dedicated to cutting the government in half, you would definitionally be cutting Medicare and Social Security.”

Scott has already said that he does not want to cut Medicare or Social Security (a fact he made clear after he received blowback from his 12-point government plan that originally called for “sunsetting” all federal programs for review every five years, including Social Security and Medicare). That means he would be looking at cutting all other so-called “discretionary” spending, which Kogan defines as “everything else.”

“The ‘everything else’ category is actually shrinking as a percentage of GDP [gross domestic product], right?” Kogan said. “So, this ‘everything else’ category is actually shrinking. So, all the people who say, ‘Oh, the government is growing, growing, growing?’ This ‘everything else’ category is actually shrinking. It’s entirely driven by Medicaid, Medicare, and Social Security, which is driven purely by demographic changes.”

The Congressional Budget Office said in its 10-year budget and economic outlook released earlier this year that projections show that “[d]iscretionary spending as a share of GDP falls to historic lows” over the next decade.

The Committee for a Responsible Federal Budget said last year that to balance the federal budget within the next decade, “all spending would be cut by roughly one-quarter and that the necessary cuts would grow to 85% if defense, veterans, Social Security, and Medicare spending were off the table.”

‘Radical cuts’

EJ Antoni is an economist with the conservative Heritage Foundation. He believes there need to be “radical cuts to the federal budget,” although he did not address whether cutting federal spending in half is realistic.

“We need drastic cuts across the board,” he told the Phoenix in an email. “Whether the effect from this is devastating or not comes down to how efficient the government can become at spending tax dollars. Either way, the spending needs to come down, and fast.

“To give you an idea of how behind the eight ball we are right now, the Treasury spent over $140 billion last month just on interest payments for the federal debt. That’s not paying the debt down, but only covering the finance charges for the $35 trillion in borrowed money. For perspective, this was the single largest line item in the Treasury’s monthly statement for June. It was more than the Social Security Administration and more than all military spending. It was also equal to over 75% of all personal income taxes collected that month.”

The Republican Study Committee, a group that includes the majority of Republican House members, offered a detailed plan in 2023 to balance the budget by including deep cuts to Medicaid and programs that fund environmental protection, public transportation, medical research, and homeland security. They would also rely on “significant reductions in Social Security and Medicare to erase the deficit,” The New York Times reported.

“Social Security, Medicare, Medicaid, and Veterans programs make up two-thirds of the non-interest, non-defense portion of the federal budget,” added Josh Bivens, chief economist with left-leaning EPI Action. “There are only two ways to interpret this statement from Sen. Scott — he is either calling for huge cuts to these programs or he is too uninformed to know this. He owes it to voters to follow up this statement by either specifying what he wants to cut or studying up and learning how the federal budget works.”

Kogan said that an aging population and increasing health care costs are what are driving up most costs of the budget — not excessive discretionary spending.

“It’s not a case that we keep ratcheting up government spending to do more for people,” he said. “What’s going on instead is that it costs more to do the same thing that we’ve done before. It just costs more because there’s more elderly people, the ratio of retirees to workers is going up, and it just costs more to do health care. What that means is, if you are cutting government spending, you are definitionally making the government do less than it did before.”

IRS agents, earmarks

The Phoenix reached out to the Scott campaign, asking whether he had presented a specific proposal on what programs he would cut to reduce the federal budget by as much as half of existing spending. They responded with this statement:

“Since his first day in the Senate, Senator Scott has been leading the charge to eliminate wasteful spending and downsize the bloated federal government,” said Will Hampson, a spokesperson for the Scott Senate campaign.

“That can start with cutting $70 billion for Biden’s 87,000 new IRS agents, putting an end to earmarks, which would save billions every year, and bringing the line-item veto to Washington.

“Senator Scott sends out a weekly inflation update offering solutions to Biden’s inflation crisis and legislation he’s championing to make Washington work more efficiently for Floridians. Senator Scott also put out a Washington Waste Series that highlights all the wasteful government spending that can be cut.

“In his Rescue America Plan, Senator Scott calls to eliminate federal programs that can be done locally and move most government agencies out of Washington. The last thing Floridians need is more government, and Senator Scott won’t stop fighting to put an end to efforts by Washington elites to raise taxes, costs, and government regulations on the American people.”