White House May Have to Make Unpopular Cuts to Achieve Trump’s Cost-Cut Goals

For President Donald Trump’s administration to achieve its spending cut target, it may have to make unpopular cuts.

President Donald Trump’s administration has laid out an ambitious cost-cutting plan to shave up to $2 trillion from the federal budget. Thus far, the cost-cutting has manifested as laying off federal employees and pausing or reallocating funding for several departments.

However, the federal government spends large parts of its budget on Medicare and Social Security benefits and interest payments on the national debt. While President Donald Trump has promised to leave Social Security and Medicare untouched in the past, economists and analysts said the White House would likely have to cut those programs to significantly dent the federal budget.

The Department of Government Efficiency, which has been tasked with finding opportunities for spending cuts, says it has saved around $52 billion so far. However, an independent analysis by NPR only confirmed $2 billion. Last year, the government spent $1.83 trillion more than it collected in the form of taxes and other revenues.

“You could close down U.S. AID and fire every federal employee, and you’re still going to have annual budget deficits well over a trillion dollars if you don’t change anything else,” said Jon Hilsenrath, senior advisor at financial services company StoneX, in an interview with Investopedia.

Cutting Safety Net Programs Would Be Unpopular

Cutting into those safety net programs could prove to be unpopular.

“The problem with reining in federal spending for so many years has been that the public tends to like the spending that gets done, and politicians tend to be reluctant to cut back,” Hilsenrath said.

According to a recent survey from business intelligence firm Morning Consult, only 5% of voters said Social Security and Medicare should have their funding cut. Roughly two-thirds of voters said the programs should receive more funding. Cuts to other safety net programs, such as Medicaid and SNAP, were similarly unpopular.

The White House could be looking to soften the harsh effects of cuts to those programs. This week, Trump and DOGE adviser Elon Musk floated the idea of sending a check to Americans as a ‘dividend’ on the savings their budget cuts could create.

Hilsenrath said that returning some of the savings directly to taxpayers could make government spending cuts politically feasible. In the past, federal spending deficits have accelerated as Republicans have successfully cut taxes and Democrats have successfully increased spending on social programs—but neither party was willing to fully offset those changes with reductions to spending in other areas.

However, should the administration cut spending on social safety net programs, the reduced aid could cause its own set of economic problems, hitting hardest at lower-income households that receive federal benefits.

“If the ‘savings’ ever got large enough to matter macroeconomically, it will be because they have gouged deep into federal programs that provide vital help to vulnerable families, and these families will be unambiguously worse off no matter how the ‘savings’ get distributed,” L. Josh Bivens, chief economist at the Economic Policy Institute, a progressive think tank, wrote in an email to Investopedia.