Why Trump Can’t Slash Spending Like Milei Did

Have you ever wondered why some leaders can swing a fiscal axe with abandon while others seem stuck in bureaucratic quicksand? The comparison between Donald Trump’s economic policies and Javier Milei’s aggressive spending cuts in Argentina has sparked heated debates among those who champion lean government. It’s tempting to expect Trump to wield a “chainsaw” approach like Milei, slashing public spending with gusto, but the reality is far more complex. Let’s dive into why Trump’s hands are tied in ways Milei’s never were and how he’s still managing to carve out fiscal wins.

The Tale of Two Budgets: U.S. vs. Argentina

The idea of slashing government spending sounds thrilling, doesn’t it? But when you’re running the United States, it’s not as simple as grabbing a chainsaw and going to town. The U.S. operates under a rigid fiscal structure, with budgets planned and locked in ways that Argentina’s more flexible system doesn’t face. Trump inherited a fiscal mess that limits his ability to make immediate, sweeping cuts, while Milei stepped into a situation ripe for bold action. Let’s break down the key differences.

A Locked Budget: The Biden Legacy

Imagine starting a new job only to find out that 97% of your budget is already spent or committed. That’s exactly what Trump faced when he took office in January 2025. The U.S. fiscal year kicks off on October 1, and the previous administration made sure to lock in most of the 2025 budget through Continuing Resolutions. These resolutions, passed before Trump’s arrival, tied up funds for everything from disaster relief to mandatory programs like Social Security and Medicare.

Fiscal policy isn’t a blank slate; it’s a maze of pre-existing commitments.

– Economic policy analyst

These resolutions included hefty allocations: over $100 billion for disaster assistance, $29 billion for FEMA’s Disaster Relief Fund, and $10 billion for agricultural producers. The Biden administration also pushed through an 8% increase—roughly $54 billion—in mandatory spending programs like Medicaid and Obamacare. This wasn’t a new budget law; it was a clever extension of existing allocations, leaving Trump with little wiggle room until the next fiscal cycle.

In contrast, Milei inherited an open budget in Argentina, where high inflation allowed him to cut spending in real terms by simply not adjusting for price increases. This flexibility let him reduce public spending by 30% almost overnight, targeting subsidies and public works. Trump, dealing with inflation under 2.5%, doesn’t have that lever to pull.

Mandatory vs. Discretionary Spending

Not all government spending is created equal. In the U.S., the budget splits into mandatory spending (think Social Security, Medicare, and Medicaid) and discretionary spending (like defense or environmental programs). Mandatory spending is the big beast—locked in by law and requiring congressional approval to change. Discretionary spending, while more flexible, is still subject to pre-existing commitments.

In 2025, Biden’s team ramped up mandatory spending, with increases kicking in from February to December. For example, the Environmental Protection Agency’s budget ballooned by $21 billion—a 700% jump! Trump could only touch $14 billion of that, as the rest was locked into mandatory programs. Defense spending, another huge chunk of the budget, was similarly tied up, leaving Trump with limited options for immediate cuts.

• Mandatory Spending: Locked by law, includes Social Security, Medicare, and Medicaid.
• Discretionary Spending: More flexible but often pre-committed, like defense or disaster relief.
• Continuing Resolutions: Biden’s tool to lock in 2025 spending before Trump’s arrival.

Milei, on the other hand, didn’t face such rigid distinctions. Argentina’s budget allowed him to slash discretionary items like subsidies without navigating a labyrinth of legal constraints. It’s like comparing a sprint to a marathon with hurdles—Trump’s running the latter.

Early Wins: Trump’s Fiscal Progress

Despite the constraints, Trump’s team hasn’t been idle. In April 2025, the U.S. recorded its second-largest fiscal surplus ever. Even though a deficit crept back in May, the cumulative deficit from March to May was slashed by 97% compared to 2024. How? Higher revenues from trade agreements and private sector growth played a big role.

I’ve always found it fascinating how economic policy can pivot on something as simple as trade deals. By renegotiating terms and boosting exports, Trump’s administration has already brought in billions in additional tax revenue. It’s not the dramatic chainsaw cut some hoped for, but it’s a solid start.

The Big Beautiful Bill: A Game-Changer?

Enter the Big Beautiful Bill, Trump’s ambitious plan to reshape the U.S. budget. This isn’t just talk—it’s a concrete proposal to cut $1.6 trillion in mandatory spending and $2.4 trillion in discretionary spending between 2026 and 2027. For perspective, this is the first significant reduction in mandatory spending in over six decades. That’s not small potatoes.

Cutting mandatory spending is like turning an ocean liner—it takes time and precision.

– Fiscal policy expert

The bill also leans heavily on deregulation and tax cuts, which some critics—surprisingly, even libertarians—scoff at. They argue it won’t boost revenue or growth, but I’m not so sure. History shows that deregulation and tax cuts, when done right, can spark economic activity. The bill projects $7 trillion in investments from trade negotiations, adding $4 trillion in tax revenue over the legislative period. Plus, there’s an estimated $1.2 trillion revenue boost from economic growth spurred by these policies.

Why do some libertarians doubt this? It’s puzzling to see them dismiss the Laffer Curve—the idea that cutting taxes can increase revenue by spurring growth. Perhaps it’s the influence of Keynesian naysayers, but I’d argue we should give credit where it’s due. These are bold moves in a system designed to resist change.

Milei’s Playbook: Why It Worked in Argentina

Javier Milei’s success in Argentina is undeniable. He slashed public spending by 30% almost immediately, targeting subsidies, public works, and non-automatic transfers. High inflation—far exceeding the U.S.’s 2.5%—gave him a unique tool: by not adjusting spending for inflation, he effectively reduced the budget in real terms. It’s a clever move, but one that doesn’t translate to the U.S. context.

Milei’s budget was also less constrained by legal commitments. Argentina’s fiscal system allowed for rapid, executive-driven cuts, unlike the U.S., where Congress holds the purse strings. Milei’s chainsaw was free to swing; Trump’s is tangled in red tape.

Trump’s Path: A Slower but Steady Cut

Don’t get me wrong—Trump’s approach isn’t timid. In his first quarter, he’s already cut public spending by 5%, saving over $540 billion. That’s no small feat in a system where 97% of the budget was pre-committed. By the end of his term, projections suggest Trump’s cuts could rival Milei’s in scale, adjusted for the U.S.’s massive economy.

1. First Quarter Cuts: 5% reduction, saving $540 billion.
2. Big Beautiful Bill: Targets $4 trillion in total cuts by 2027.
3. Revenue Boost: Trade deals and deregulation to add $5.2 trillion in tax revenue.

What’s striking is the similarity in philosophy. Both Trump and Milei champion tax reduction, deregulation, and private sector growth. But while Milei could act fast, Trump must navigate a slower, more deliberate path. It’s less about reluctance and more about the reality of governing a complex economy.

Why the Criticism Misses the Mark

I’ll be honest: it’s frustrating to hear libertarians criticize Trump for not being “liberal enough.” Name one U.S. administration that’s tackled mandatory spending cuts, deregulation, and tax reform on this scale while navigating a hostile Congress. The Big Beautiful Bill is a historic push, yet some dismiss it, clinging to Keynesian doubts about revenue growth. Denying the impact of trade deals or deregulation feels like a betrayal of free-market principles.

Skepticism is healthy, but ignoring evidence of fiscal progress is shortsighted.

Perhaps the most interesting aspect is how critics overlook the long game. Trump’s policies aren’t about instant gratification; they’re about setting the stage for sustainable growth. By 2027, the combined effect of spending cuts and revenue boosts could transform the U.S. fiscal landscape.

Looking Ahead: A New Fiscal Era?

So, what’s the takeaway? Trump’s not wielding a chainsaw because he can’t—not because he doesn’t want to. The U.S. system, with its locked budgets and congressional hurdles, demands a different approach. Yet, the early results—$540 billion in savings, a record surplus, and a bold plan for $4 trillion in cuts—show he’s not sitting idle.

In my view, comparing Trump to Milei is like comparing apples to oranges. Both leaders share a vision of smaller government and economic freedom, but their battlegrounds are worlds apart. As Trump’s policies unfold, we might just see a fiscal revolution that rivals Milei’s in impact, if not in speed.

Fiscal Strategy Breakdown:
  U.S.: Locked budgets, slow but deep cuts
  Argentina: Open budgets, rapid slashing
  Shared Goal: Less government, more growth

Can Trump pull it off? Only time will tell, but the numbers so far are promising. For those of us rooting for leaner government, it’s worth keeping an eye on how this plays out. After all, sometimes the slowest cuts are the ones that last.