What Stephen Miller gets wrong about debt and immigration

The U.S. national debt surpassed 100 percent of gross domestic product last month, putting the country on track to break the record of 106 percent of GDP set in 1946., Coming out of World War II. That record is expected to be broken in 2029, nonpartisans say, once Donald Trump’s presidency ends. Congressional Budget Office predictions.

White House Deputy Chief of Staff Stephen Miller identified a criminal For what could otherwise be a terrible legacy.

“Based on what I’ve seen and heard, I believe we can balance the federal budget if the only dollars that come out of the Treasury go to the people who are legally eligible to receive them,” Miller said at the Trump administration’s anti-fraud event on Tuesday.

Miller’s figures greatly exaggerate the federal government’s published estimates of misspent funds and overlook that immigrants generally help improve the budget deficit rather than worsen it. But it’s not just misleading math that’s the problem. The Trump administration’s failure to take the budget deficit seriously is exacerbating Americans’ affordability crisis today and threatening a debt crisis in the future. The deficit is the difference between what the federal government receives in taxes and other revenues and what it spends. This increases the federal debt.

Miller was building on it Previous comments that have placed the nation’s spending problems at the feet of immigrants who are in the United States illegally either fail to acknowledge the American system or both. Miller said Tuesday that stolen or otherwise misappropriated benefits have “laundered” hundreds of billions of dollars from taxpayers, or even trillions of dollars, as he noted in March.

“The transfer of American taxpayers’ wealth to people who don’t belong here is the root cause of the national debt.” Miller said Next to the president on March 16.

The White House did not immediately respond to a request for comment on Miller’s remarks.

The national debt is obvious $31.4 trillion. Presidents and members of Congress from both parties have agreed to unbalance spending in the decades since President Bill Clinton briefly managed to balance the budget in the 1990s. But recent years have seen a sharp acceleration in debt-financed spending. Trump cut taxes in his first term, but launched a Covid spending spree that culminated in a massive stimulus package under President Joe Biden. This spending prevented a recession at the expense of overheating the economy and contributed to the inflation that still plagues Americans.

Treasury Secretary Scott Bessent he said before he was elected For this job, he wanted Trump to reduce the budget deficit to below 4% of GDP by the end of his term. There’s still time, but the outlook doesn’t look good. The deficit reached 5.8% of GDP in fiscal 2025, which ended in September. According to CBOor approximately $1.8 trillion.

Are illegal immigrants to blame? If so, government investigators didn’t see it. Federal investigators overall reported $186 billion in improper payments last year, or about 10% of the shortfall, according to one nonpartisan organization. Government Accountability Office. These figures do not capture the entire fraud, but they do reflect some payments that were exaggerated but not entirely misdirected.

Democrats and Republicans have debated for years whether it was possible to reduce the budget deficit simply by reducing waste, fraud or abuse.

It is difficult to refute Miller’s claim. It’s possible for scammers to steal large sums of money right under the hapless noses of federal bureaucrats. This happens. The GAO found that improper payment data could account for as much as $3 trillion since 2003, or less than a two-year shortfall at current rates.

But if fear of suspected fraud is used to reduce immigration, Americans will suffer. That’s because immigrants don’t drain federal budgets, they buffer them. researchers He was at the libertarian Cato Institute. Immigrants added $14.5 trillion to the financial bottom line over 30 years, from 1994 to 2023, according to a report by the Cato Institute. They tend to receive less in Social Security and Medicare than other Americans, both because they have less history of working in the U.S. and because some are ineligible as undocumented immigrants. Among other explanations, they tend to receive less public education because they arrive later in life.

What increases the current account deficit? Americans as a whole are aging, and therefore their retirement and health care is more expensive to provide. Meanwhile, debts are increasing and interest payments now exceed the army’s annual expenses.

There is no magic number at which debt becomes too much. And unlike a business or household, a government cannot default because its debts are tied to the dollars it prints. States must balance their budgets, but there is no such requirement for the federal government.

Debt is not free. The U.S. government is adding so much money each year that it’s not clear there will always be buyers of government bonds at prices Americans are willing to pay.

Bond managers’ concerns have real effects on Americans. yield on 10 year Treasury The score determines how much consumers pay for mortgages, auto loans, credit cards and other debts. The day after Trump won the 2024 election, the rate was 4.3 percent. Bessent said he looks at the 10 years as a barometer of the administration’s success.

But the 10-year period remains above the level it was when Trump won. It was down about 20 basis points, or one percent, to just under 4.5% by midday Wednesday, as investors digested the possibility of an imminent end to the Iran war, easing inflation concerns. But there is also a floor beneath those returns, determined in part by the U.S. government’s endless plans to lend new amounts of money.

None of this would be such a problem if there was a chance the bigger picture could be fixed. But the second Trump administration has repeatedly used the deficit as a cudgel to attack perceived rivals, making any compromise much less likely. Elon Musk’s failed Government Efficiency Department reduce waste and alienate potential allies those who are excited by the prospect of a serious reform effort.

While Republicans will have great political success in avoiding those elections, Democrats will have little incentive to campaign for tough fiscal choices in or after the midterm elections. Ironically, Democrats’ loudest voice on fiscal sanity lately has been democratic socialist Mayor Zohran Mamdani, who recently proudly declared progress. Balancing New York City’s budget.

But this is easier in a place where state laws require balanced budgets. Vice President Kamala Harris’ brief 2024 campaign did not commit to a limited spending plan and even proposed raising some taxes. Democrats’ 2028 candidates will face intense pressure to be much more aggressive on government spending and less fiscally conservative.

The deficit cannot be fixed by cutting payments to immigrants. And the debt crisis won’t be solved until it reaches a level that makes taking the medicine less painful than the disease. Whether Stephen Miller knows this or not, his comments on Tuesday make it a little more likely.