President Trump’s Address to Congress: Growth, Debt, and Tariffs

Originally posted on X.

President Donald Trump’s address to Congress portrayed a vision of “America is back!” This includes faster economic growth centered on tax cuts, deregulation, and less government spending.

While these proposals are critical for ensuring America’s competitiveness, his speech failed to address two major economic threats that will impact every American: the mounting national debt and the costs of tariffs. These would be drags on economic growth, real wages, and prosperity.

While Trump’s instincts to cut government overreach are necessary, true economic prosperity requires confronting the nation’s spending crisis and embracing free trade.

Trump’s call for cutting government spending is necessary, especially considering that the national debt has surpassed $36 trillion and the debt-to-GDP ratio exceeds 120%. 

Over the past year, the debt has grown by $2 trillion, and annual interest payments are now about $1 trillion. Interest payments now consume a larger share of the federal budget than spending on national defense. This burden will only grow as interest rates rise and more debt is added, crowding out spending on key services like defense, the justice system, etc.

If Washington continues reckless spending, the cost will fall even harder on American families through higher taxes, faster inflation, and reduced access to public services.

Trump’s speech rightly criticized wasteful spending but failed to address the biggest drivers of the nation’s budget crisis: Social Security and Medicare. These two programs account for over half of all federal spending and more than $100 trillion in unfunded liabilities. Without reform, Social Security’s trust fund will be depleted by 2034, triggering automatic 21% benefit cuts. For millions of retirees who rely on Social Security to make ends meet, these cuts would significantly reduce their standard of living. Similarly, Medicare’s Hospital Insurance Trust Fund is expected to run out by 2036, which would create a major shortfall in funding for seniors' health insurance.

Reform is urgent. Since their inception, Social Security and Medicare’s problems have been like a Ponzi scheme as debt and workers pay for retirees’ payments. We can no longer wait to address these welfare programs, as the longer we wait, the more drastic the necessary changes will be on retirees and workers.

Trump could have led on entitlement reform by proposing gradual fixes—raising the retirement age, means-testing benefits for wealthier retirees, or creating options for private savings accounts, especially for younger workers. Without these reforms, the alternative is either large tax hikes or draconian benefit cuts, neither of which would be palatable to voters.

In his speech and previous comments, Trump missed an extraordinary opportunity to address these challenges, leaving future generations to bear the burden of a growing fiscal crisis.

On the positive side, Trump’s pledge to make permanent improvements to the 2017 Trump tax cuts is an essential policy for economic growth. Lowering taxes puts more money in the hands of individuals and businesses, spurring investment and job creation.

Before the pandemic, the 2017 tax cuts helped drive record-low unemployment and rising wages. However, tax cuts alone are not enough if government spending remains unchecked. While tax relief helps boost growth, the rising debt and unfunded liabilities will eventually overwhelm these gains if the government doesn’t control its spending.

Running trillion-dollar deficits while cutting taxes is a short-term solution that leads to long-term consequences. If Trump is serious about maintaining tax cuts, he must pair them with meaningful spending reductions to keep debt levels manageable.

The most concerning aspect of Trump’s speech was his renewed push for tariffs on China, Mexico, and Canada.
Trump argued that tariffs would protect American jobs and reduce the trade deficit, but history shows that tariffs are taxes on American consumers. Past tariffs drove up prices on electronics, household goods, and other essentials, hitting families and small businesses hardest.

In addition to increasing costs, tariffs provoke retaliation from different countries, threatening American exports. If these tariffs continue, American farmers and manufacturers, already struggling to access foreign markets, will face even steeper barriers to trade and likely bailouts like last time.

The U.S. should reduce corporate taxes, eliminate regulatory barriers, and foster global competitiveness rather than rely on mercantilist protectionism.

Free trade, not government-imposed tariffs based on a flawed mercantilist view, strengthens the economy by giving businesses access to cheaper materials and larger markets. By lowering the cost of doing business, Trump could help create more jobs and keep prices lower for consumers. Tariffs do the opposite: They disrupt supply chains and drive up costs for Americans.

Trump’s economic vision contains many strong elements, mainly his focus on cutting wasteful spending, improving tax cuts, and ensuring deregulation. These policies would allow businesses to expand, wages to rise, and the economy to grow.

However, the failure to address “entitlement” reform and the continued reliance on tariffs undermine the long-term sustainability of his economic plan. If Trump wants to restore America’s economic strength, he must confront the country’s fiscal challenges by addressing Social Security and Medicare reform, reducing the national debt, and shifting away from protectionist trade policies.

Ultimately, the path to long-term prosperity is clear: cut spending, shrink government, and champion free markets. If Trump remains committed to these principles, his policies could fuel another wave of prosperity. But if the U.S. continues with rising debt, higher tariffs, and an ever-expanding government, the risks to economic freedom and growth will be severe.
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Now is the time for fiscal discipline. By reining in government and unleashing the private sector, we can restore and secure American prosperity for generations. In short, Trump can let people prosper!