Thoughtful Money with Adam Taggart David Stockman: If It Doesn't Cut To The Bone, DOGE Won't Succeed
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Mar 23, 2025 David Stockman, former Congressman and Director of the Office of Management and Budget under Reagan, shares his deep insights on the urgent need for budget cuts to tackle the soaring fiscal deficit. He critiques the current administration's economic strategies, warns of looming global economic challenges, and discusses the complexities of U.S. fiscal policies. Stockman emphasizes the need for reforms in healthcare and social programs while suggesting safer investment strategies amidst market uncertainties.
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Reagan's 1981 Budget Cuts
- In 1981, the Reagan administration achieved significant spending cuts due to political momentum after the assassination attempt.
- This momentum facilitated the Budget Reconciliation Act, reducing spending by $200-250 billion in today's dollars.
Rescissions and Discretionary Spending
- The executive branch must obtain rescissions from Congress to avoid spending appropriated funds, even on wasteful projects.
- This process applies only to discretionary programs (20% of the budget), not entitlements or mandatory spending.
Prioritize Rescission Bills
- Congress should prioritize passing a large rescission bill before enacting continuing resolutions to curb excessive spending.
- This would allow for immediate cuts before re-upping funding, setting the stage for broader changes in the next fiscal year.
