Trump’s Second Term: a Pro-Growth Mandate

Editor’s note: this piece is by Vance Ginn.

Donald Trump’s return to the White House presents a historic opportunity to correct the economic damage wrought by the Biden administration’s reckless policies. Over the past four years, Americans have endured skyrocketing government spending, heavier tax burdens, overreaching regulations, and more damaging tariffs. Add in the Federal Reserve’s excessive money creation, and these policies have left the nation grappling with persistent inflation, a $36 trillion national debt, and an economy that is increasingly out of reach for many Americans.

Trump’s second term must go beyond undoing Biden’s excesses. It should fundamentally shift power away from Washington and back to the states and individuals. With the newly announced Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, Trump has the tools to dramatically shrink the federal government and restore the principles of federalism. This team must act boldly to ensure the federal government does less while empowering states and people to do more.

The question is whether Trump will seize this opportunity to use the bully pulpit and his veto power to push Congress toward meaningful reforms—or let it slip away. If not now, when? If not him, who?

Undoing Biden’s Burdens: Fiscal Discipline is Critical

The Biden administration’s spending spree has driven federal outlays to historic highs. Multi-trillion-dollar programs like the American Rescue Plan Act, the so-called “Inflation Reduction Act,” corporate welfare in the CHIPs Act, and pork-laden infrastructure bill have ballooned the national debt while failing to deliver tangible benefits to most Americans. Interest payments now exceed $1 trillion annually, threatening to crowd out essential services and private investment.

Trump’s first term delivered significant regulatory and tax cuts, but spending grew too fast and protectionism ran amok, undermining the gains. This time, fiscal restraint must take center stage. The focus should be on having Congress cut government spending by eliminating waste, fraud, and abuse of programs and reforms to mandatory programs like Social Security, Medicare, and Medicaid. Congress should then pass a spending limit modeled after Colorado’s Taxpayer’s Bill of Rights (TABOR) to rein in runaway budgets. TABOR imposes maximum spending changes to population growth plus inflation, with surplus revenues returned to taxpayers that should be lower tax rates rather than refund checks. This would prevent unchecked federal government expansion and protect taxpayers’ wallets.

Trump can push Congress to act by pledging to veto any bill that doesn’t include spending limits or significant cuts to wasteful programs. The Department of Government Efficiency should lead in identifying redundant agencies and ineffective programs for elimination. It’s time to do what Washington has avoided for decades: prioritize fiscal sanity.

Federalism: Returning Power to States and Individuals

America’s founders envisioned a federal government limited in scope, with most responsibilities residing with states and people. Yet under Biden, Washington has further entrenched itself in healthcare, education, energy, and welfare, leaving states with less flexibility to address their unique needs.

Restoring federalism is key to reversing this overreach. Trump must advocate for devolving responsibilities to the states, empowering them to tailor solutions to their demographics and challenges. This shift would encourage innovation, reduce federal inefficiency, and bring the government closer to the people it serves.

Healthcare reform is a prime example. Biden’s expansion of government-run healthcare programs has increased costs and reduced quality. Trump’s administration should champion market-based solutions like Health Savings Accounts (HSAs) and direct primary care models, which give individuals greater control over their healthcare decisions. Similarly, redirecting the tax deduction for employer-sponsored health insurance to individuals would create a more equitable and efficient system. States and, more importantly, doctors and patients could then decide how best to manage healthcare without federal mandates.

Tax Reform: Lower, Simplify, and Empower

Biden’s tax hikes have stifled economic growth and made American businesses less competitive. Corporate tax increases and higher individual tax burdens have left families and businesses struggling under a heavier load.

Trump must double down on pro-growth tax reform by making most, if not all, of the Trump tax cuts of 2017 permanent while further simplifying the tax code and reducing rates. A flat personal income tax with the lowest possible rate and a corporate tax rate cut to at least 15%—or ideally zero—would create a globally competitive environment, encourage investment, and leave more money in Americans’ pockets.

Corporate taxes are ultimately passed on to workers and consumers, so eliminating them would directly benefit households. Tax simplification would also reduce compliance costs, freeing up billions of dollars for more productive uses.

Regulatory Overhaul: Unleashing American Potential

The Biden administration’s regulatory agenda has imposed crushing burdens on businesses, from energy production to labor markets, totaling nearly $2 trillion in final rules. These rules have driven up consumer costs, stifled innovation, and weakened America’s competitive edge.

Trump’s first term saw significant progress in limiting the regulatory burden, but the work isn’t over. The Department of Government Efficiency, under Musk and Ramaswamy, can lead efforts to implement a regulatory budget—limiting the total economic cost of new rules and requiring cuts to offset any additional costs instead of just considering the number of regulations.

Energy policy should be a top priority. Biden’s war on fossil fuels has made energy less affordable and more dependent on foreign producers than otherwise. Removing unnecessary restrictions on domestic production would lower costs, create jobs, and strengthen national security.

Rejecting Tariffs: Embracing Free Trade

Biden doubled down on protectionist tariffs, extending Trump-era measures and adding new barriers that have functioned as hidden taxes on American consumers. These policies have driven up costs across the economy without achieving their goals of reducing trade deficits or addressing unfair practices in China or elsewhere.

Trump must chart a new course by rejecting tariffs and embracing free trade agreements. Lowering trade barriers would reduce costs for families, open new markets for American businesses, and enhance economic efficiency. Free trade fosters competition and drives innovation, empowering American workers to succeed globally.

Seizing the Moment: Leadership for Prosperity

The Biden administration has shown Americans the dangers of big government—runaway spending, higher taxes, suffocating regulations, and protectionist trade policies. This is a crisis, but as Rahm Emanuel famously said, “Never let a good crisis go to waste.”

Trump’s second term provides a once-in-a-generation opportunity to shrink the federal government and restore power to the states and the people. The Department of Government Efficiency must be empowered to provide paths to cut waste, streamline bureaucracy, and return authority to local communities.

Trump has the tools to lead this transformation. He can deliver the smaller, more accountable government Americans deserve by using the bully pulpit, leveraging veto power, and championing free-market reforms. If not now, when? If not him, who? Americans elected Trump to reduce government overreach and restore economic freedom. His legacy will be defined by whether he rises to this challenge—or lets it slip away.

The path forward is clear: less federal control, more state innovation, and an unyielding commitment to policies that let Americans prosper. Let’s not waste this opportunity to reshape America for the better.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, and previously chief economist of the Trump White House's OMB. See his Policy Guide for federal, state, and local lawmakers to let people prosper. Follow him on X.com at @VanceGinn.