You are at a carnival (quizzically named ‘Let’s call it a year’).
It’s nice, boisterous, and crowded.
Everyone looks happy. Everyone is happy.
You are uneasy. You look around.
Past the colossal, gyrating rides. Past the rollercoasters that spiral and coil as they twist their way through the night skies. Past the clowns on stilts.
You are now looking at the space outside the carnival’s fence.
It’s dark.
You see the contours of something at the very edge of that darkness.
You don’t have a golfer’s vision and yet, even at that distance, you know what it is ─ its that old bogey man again.
The one that goes by the name ‘US Debt Ceiling’!
Forgive the dramatic prologue, but these lines pale in comparison to the theatrics on display in Washington every time the US is close to its debt ceiling deadline.
So, while there are truckloads of press around the newly announced @DOGE, a look at the calendar confirms what hasn’t been addressed yet – the return of that bogeyman.
DOGE is expected to conclude plans to axe $ 2 trillion in spends ‘no later than July 4, 2026’
Inauguration Day is Jan 20, 2025.
You will recall that the US suspended the debt ceiling in Jun 2023.
The events leading to the ceiling suspension in 2023 were both chaotic and farcical: among others, there were whispers ‘that a trillion-dollar coin could be minted as a last-ditch solution’ and Biden could potentially invoke an archaic amendment ─ 14th amendment (Sec 4) ─ that could help him override Congress.
That Jan 1 ceiling reinstatement date implies Trump has no reaction time (and explains why the DOGE announcement was a priority).
There is also another uncomfortable first here ─ this is going to be the first time that there will be a change in govt while the ceiling is still in suspension!
What might work for Trump is how the Republicans voted the ceiling suspension in 2023. There was broad consensus on spending cuts.
Infact, the opening bid from the Republicans during the 2023 ceiling talks was for $4.8 trillion in savings over a decade. They eventually won about $1.5 trillion in reductions.
While some of these spending cuts appeared ‘unrealizable’ then, the Trump trifecta of the White House, the Senate and the House could make it easier for Trump to push through some of DOGE’s earliest recommendations during the ceiling talks early next year.
And amidst all this, spare a thought for that motley group of activists who, until a few years ago, occupied a tiny corner of the US political landscape: from within the Republican Party, they formed the TEA Party movement in 2009, advocated for lower taxes, a reduction of debt, decreased spending and a smaller government.
It’s that core set of TEA party ideas that Trump will look to execute.
It’s early days.
But if there is a formula to define Trump’s fiscal legacy it would be this:
Reagonomics + Reduction in Federal Spending + Plateauing of national debt.
