Departments of the U.S. federal government will likely resort to mass firings of their employees as they obey an order by president Donald Trump to slash spending by five percent or more in the 2019 fiscal year.
Trump, however, did not include the Department of Defense -- one of the largest recipients and wasters of federal money -- in the order.
The coming firings and other cost-cutting measures are Trump's response to the massive $779 billion budget deficit for fiscal 2018 caused by his Republican Party's Tax Cuts and Jobs Act of 2017. This law slashed the corporate tax rate from to 21 percent from 35 percent while some related business deductions and credits were either reduced or eliminated.
Only last month, Trump junked the 2.1 percent across-the-board raise for most federal workers. He also trashed separate locality pay increases averaging 25.7 percent. He made it worse by announcing that the salaries of federal employees will be based on performance.
Any increase must also be designed to recruit, retain and reward "high-performing Federal employees and those with critical skill sets." Those that don't will be fired.
The 2018 deficit is the highest since 2012. The non-partisan Congressional Budget Office (CBO) estimates the budget deficit will skyrocket to more than $1 trillion in the 2019 fiscal year and will continue growing indefinitely. A budget deficit of $1 trillion was originally expected to occur by 2020.
Most experts agree the deficit was caused by the Republican Party's budget-killing Tax Cuts and Jobs Act of 2017.
Trump said he'd like the federal departments "to come back with a 5 percent cut," and that if they do more than that, he'll be very happy. "Get rid of the fat. Get rid of the waste," ordered Trump.
Trump also said he'd want the Defense Department to be exempted from the five percent cuts. "It's defense. It's very important," claims Trump.
The Department of the Treasury said Republican-led tax cuts squeezed revenues.
CBO credited the spike to the Republican tax law and much higher government spending. It reported that federal spending rose by $222 billion, or 32 percent, in the first 11 months of fiscal 2018 year-on-year.
Corporate taxes plummeted by a massive 30% this fiscal year. CBO said this was due to the lower corporate tax rates championed by the GOP.
The government is now relying on individual income taxes to keep it afloat. Individual income and payroll taxes climbed 4% as rising wages - mostly due to more people having jobs -- offset a lower withholding rate. This means ordinary workers and employees are doing more to prop up government finances than billion dollar corporations.
Many Republicans, including Trump, blame the mammoth deficit on other government spending and social programs, and not on their tax cuts law.
Senate Majority Leader Sen. Mitch McConnell (R-KY) is blaming the massive federal budget deficit on middle-class and poor Americans. At the same time, McConnell threatened to balance the budget by slashing Social Security, Medicare, and Medicaid payouts vital to tens of millions of Americans.
He made no mention of this Republican-backed law that overwhelmingly benefited the rich and increased military spending for the deficit. Analysts estimate the tax cuts will cost the federal government more than $2.3 trillion over 10 years.
