Congressional Republicans look set to go on a spending spree. According to reporting from the Wall Street Journal, congressional Republicans are moving away from the idea that tax cuts need to be paired with spending cuts. Republicans also look set to boost agricultural subsidies by $10 billion.

These signs bode ill for DOGE, the Department of Government Efficiency effort led by Elon Musk and Vivek Ramaswamy. It’s hard to find a more wasteful program than the farm bill, with 80 percent of crop insurance subsidies going to corn, soybeans, wheat, and cotton, which are usually monocropped with environmentally destructive consequences. Americans’ health suffers too: Americans who eat fewer subsidized foods have lower risk of becoming obese. If Republicans can’t even hold the line on ag subsidies, what will they cut?

Republicans’ caving on spending was predictable. My research shows that when Republicans take unified control of the federal government, they on average increase the federal budget by nine percentage points more than the average increase under divided government. (When Democrats take over, they increase the budget by 10 percentage points more than the divided-government average increase.) Congressional Republicans clearly expect 2025 to be business as usual: busting the budget on the priorities of their favorite special interests.

But President Trump’s priorities should be different from those of congressional Republicans. A big spending binge now will cause headaches down the line. Already interest on the debt exceeds defense spending. Federal debt held by the public is at 96 percent of GDP, and when you add in state and local (which you need to do for international comparisons), government debt is around 108 percent of GDP, only about 25 percentage points below where debt-burdened Italy sits and now above Spain, formerly one of the biggest debt risks in Europe. 

Along with the significant costs it imposes on everyday people, the rising debt removes any leverage President Trump might have had to stimulate the economy or to provide tax cuts later on. If Republicans lose the 2028 election because of a bad economy, it will bode poorly for President Trump’s legacy.

Keynesian economists like Paul Krugman say we shouldn’t worry about the debt, because it’s well below where Japan is. But since Japan’s debt exploded, its GDP per capita has essentially flatlined. US GDP per capita is now 59 percent higher than Japan’s. The only other large developed country with a twenty-first century growth record as bad as Japan’s is… Italy.

If Republicans want to kill the American growth machine, by all means they should continue to spend like drunken sailors. But if they want to super-charge the American growth machine, they will slash spending. Cutting federal spending will increase growth now, because it will reduce future expectations of tax increases. Right now, every investment advisor is urging people with higher incomes to convert their savings into Roth IRAs — they are betting taxes will go up in the future. Imagine what businesses are doing, what long-term investments they’re foregoing because they don’t want, or can’t predict, the future tax liability. Firms have increased their cash holdings over time to deal with macroeconomic uncertainty, including possible future tax increases and higher interest rates caused by the surging debt. Imagine if that cash were freed up for investment in research and development and fixed capital.

Cutting spending and deficits could make it happen.