The Shocking Austerity of Trump 2.0

In the month or so since Donald Trump took office, something new has happened: He has become an austerity president.

Trump, Elon Musk, and the rest of their team have frozen spending on hundreds of contracts. They’ve fired as many as 200,000 people across the federal government, delivering what is essentially a massive cutback in the provision of government services. Climate and energy programs have been particularly hard hit. The Energy Department is subjecting dozens of contracts meant to build new factories and industrial sites to a political review, and the Environmental Protection Agency has tried to claw back $20 billion from new green banks. Trump has talked about slashing the EPA’s budget by roughly two-thirds.

These changes have been quick, chaotic, and — frankly — a little surprising. They represent a big change from Trump’s first term. And as I survey the Trump administration, I’m not sure that Trump has realized quite what a transformation they represent. After all, he has a lot of the same people around him as he did last time — with one big exception. But now they are doing something different.

Russ Vought, the Project 2025 author who leads the White House Office of Management and Budget, has attracted a lot of attention during Trump’s second term. But he led the White House office during Trump’s first term, too.

Back then, Vought would publish budgets that defied belief. In his proposal for fiscal year 2017, for instance, he wanted to cut the EPA’s budget by nearly a third, resulting in its smallest inflation-adjusted budget in 40 years. He hoped to fire 20% of the EPA’s workforce. He tried to cut from a slew of programs at the National Oceanic and Atmospheric Administration, including its weather satellite office. And he slashed climate-friendly programs in the Energy Department, including the advanced energy-tech initiative called ARPA-E.

Sometimes Trump didn’t seem totally aware that his administration had proposed these cuts. In 2019, the White House offered a budget that would have zeroed out funding to the Special Olympics. After Democrats hammered the idea during a hearing with then-Education Secretary Betsy Devos, Trump ordered the proposal to be rescinded. But his White House had actually proposed identical cuts during the first three years of his term.

Even when they weren’t about the Special Olympics, these were enormously unpopular proposals, and they generated a flurry of bad press for Trump. But they also never took effect. Congress took one look at Trump’s proposals — which were really Vought’s proposals — and ignored them. Instead, it passed budgets that bumped up funding to many federal agencies, including NOAA and the Energy Department, and Trump signed them. Congress even abandoned the “sequester” — the strict limits on government spending that had prevailed during Obama’s second term.

For this reason, federal government spending actually increased under Trump. Although Trump doesn’t control states or cities, the same trend happened at the local level, too: State and local government expenditures continued to rise throughout Trump’s first presidency after plateauing in the early 2010s.

The upshot was that press coverage under Trump diverged from what was actually happening. In the news, Vought and Trump kept proposing extreme budget and staffing cuts to popular agencies, such as the National Park Service, but in reality, Trump increased federal spending, helping to deliver the boost to demand that the economy needed in the late 2010s.

This dichotomy helps explain where we find ourselves now. Government spending is obviously not a perfect — or even a very good — proxy for government effectiveness. But during the pre-COVID phase of Trump’s presidency, public-facing services at most levels of government did not get worse — even though he kept talking about big cuts to agencies. (Administration of the agencies themselves got worse, but the public did not see this deterioration.)

Trump 2.0 has violently snapped this pattern. The new Trump administration has indiscriminately slashed staff across the federal government. It has effectively shuttered the U.S. Agency for International Development, likely illegally. It has terminated new hires as well as any worker who was promoted in the past year or two across the government, including within NOAA, the National Weather Service, and the National Park Service. (A federal judge ruled on Thursday that some of these firings are probably illegal, too.) And it has blocked farmers, companies and local governments from accessing the federal grants and loans that they had already been promised.

Unlike last time, Republicans in Congress have not yet blocked these cuts. Although some GOP lawmakers have privately begged Trump for some cuts to be reversed, they haven’t succeeded in freeing the money. Lawmakers are acting like Vought’s untested theory of impoundment — which says that the executive branch can treat Congress’s spending authorizations as a ceiling, but not as a floor — is going to protect them from voters’ irritation when popular federal programs get worse. (Some are also surely hoping that the Supreme Court will nix Trump and Vought’s untested theory.) During budget negotiations, this sleight of hand has let GOP negotiators claim that they’re holding appropriations at current levels even though Trump now seems to have no interest in spending that money — or administering the programs that it enables.

No matter what happens, Trump’s staffing cuts will not make a significant dent in the deficit. The government spends only 0.2% of GDP on its personnel, while the deficit is now more than 6% of GDP. (Medicaid spending, by comparison, is about 2% of GDP.) But the cuts will probably make the government worse at providing services to Americans, especially if Musk accomplishes his most ambitious plans, such as cutting half of Social Security Administration employees. The cuts are also unpopular: Musk is generally underwater with voters in recent polls.

This is a genuinely new political situation for Donald Trump, and I’m not sure that he realizes it because his administration’s stated goals have not changed significantly. During his first term, Vought kept trying to pull off painful staff and budget cuts — but they never materialized, meaning that they never resulted in a noticeable deterioration in public administration. Now Vought and Musk are actually making the cuts happen and changing the facts on the ground. Does Trump, floating as always on the surface of understanding, realize that his government’s effective policy has changed since 2017? If so, he’s not acting like it.