White House Chief of Staff Stephen Miller speaks with reporters outside the West Wing of the White House on August 29, 2025 in Washington.
Andrew Caballero-Reynolds | AFP | Getty Images
The US national debt rose by more than 100% of gross domestic product (GDP) last month, putting the country on track to break the record of 106% of gross domestic product (GDP) set in 1946 after World War II. The nonpartisan Congressional Budget Office predicts the record will be broken at a pace around 2029, when President Donald Trump’s term ends.
White House Deputy Chief of Staff Stephen Miller has identified the culprit in what could otherwise be a disastrous legacy.
“Based on what I’ve seen and heard, I believe we can balance the federal budget if we only take the dollars that come out of the Treasury and give them to the individuals who are legally entitled to receive them,” Miller said at the Trump administration’s anti-fraud event on Tuesday.
Mr. Miller’s numbers far exaggerate the false funding estimates released by the federal government and miss the point that immigrants generally help improve the budget deficit, not worsen it. But the problem isn’t just misleading math. The Trump administration’s inability to take the budget deficit seriously is exacerbating today’s crisis of affordability for Americans and threatening to lead to a debt crisis in the future. The deficit is the difference between the amount the federal government receives from taxes and other revenues and the amount it spends. This increases the federal debt.
Mr. Miller’s comments build on previous comments placing the burden of state spending on immigrants who are in the U.S. illegally, immigrants who don’t buy into the U.S. system, or both. Miller said Tuesday that hundreds of billions of dollars, or as he said in March, trillions of dollars, are being “fleet” from taxpayers as benefits are stolen or misappropriated.
Asked about Miller’s comments, White House Press Secretary Khush Desai said the administration’s fraud task force “on a daily basis uncovers levels of fraud across federal programs that were previously unimaginable to government forecasters and working Americans.”
“The extraction of wealth from American taxpayers to people who don’t belong here is the primary cause of our national debt,” Miller said with the president on March 16.
National debt reaches $31.4 trillion. Presidents and lawmakers of both parties have been promising disproportionate spending for decades, ever since President Bill Clinton briefly balanced the budget in the 1990s. However, in recent years, debt-based spending has accelerated rapidly. Trump cut taxes in his first term, but then a coronavirus spending frenzy began, culminating in a massive stimulus package under President Joe Biden. This spending stave off a recession at the expense of overheating the economy, contributing to the inflation that still plagues Americans.
Before being elected to the position, Treasury Secretary Scott Bessent said he wanted President Trump to reduce the deficit to less than 4% of gross domestic product by the end of his term. There is still time, but the trajectory is not good. The deficit for fiscal year 2025, which ends in September, amounted to 5.8% of GDP, or about $1.8 trillion, according to the CBO.
Are illegal immigrants responsible? If so, government investigators haven’t seen it. Federal inspectors general reported $186 billion in improper payments last year, about 10% of the deficit, according to the nonpartisan Government Accountability Office. While these numbers do not capture all fraud, they do capture some payments that were exaggerated, although not completely misdirected.
Democrats and Republicans have long debated whether it is possible to reduce the budget deficit purely by cutting waste, fraud, and abuse.
Miller’s argument is difficult to disprove. Scammers may be stealing billions from the noses of hapless federal bureaucrats. It happens. A GAO study found that improper payment data could total up to $3 trillion since 2003, equivalent to less than two years’ worth of deficits at the current pace.
But if we use fear of fraud charges to cut immigration, Americans will suffer. That’s because immigration buffers the federal budget, rather than draining it, researchers at the libertarian Cato Institute found. Immigration added $14.5 trillion to fiscal revenues over the 30-year period from 1994 to 2023, according to a Cato Institute white paper. They tend to receive less from Social Security and Medicare than other Americans. This is because some people have little work experience in the United States and are ineligible as illegal immigrants. They also tend to have less access to public school education because they arrive later in life.
What is driving the deficit? Americans as a whole are getting older, making it more expensive to cover retirement and health care costs. Meanwhile, the debt has grown, with interest payments now exceeding annual military spending.
There is no magic number at which you will become overly indebted. And unlike businesses and households, government debt cannot be defaulted because it is controlled by the dollars the government prints. Each state must balance its budget, but the federal government has no such requirement.
Debt is not free. Because the U.S. government adds so much money each year, it’s not clear that there will always be buyers through bonds at prices Americans are willing to pay.
Bond managers’ concerns have real implications for Americans. yield of 10 year treasury The note determines the amount consumers pay for mortgages, car loans, credit cards, and other debts. The day after Trump won the 2024 election, it was 4.3%. Bessent said he is looking to the next 10 years as a barometer of his administration’s success.
But for the past decade, it’s still higher than it was when President Trump won. It was down about 20 basis points, or one-hundredth of a percentage point, to just under 4.5% by midday on Wednesday, as traders digested the possibility that the Iran war could end soon and inflation concerns eased. But there is also a floor to these yields, set in part by the U.S. government’s plan to issue new bonds without limit.
This is less of a problem if there is a prospect of a broader correction. But the second Trump administration has repeatedly used deficits as a cudgel to attack perceived opponents, making any compromise much less likely. Elon Musk’s failed Ministry of Government Efficiency did little to reduce waste and alienated potential allies who were excited by the prospect of serious reform efforts.
Democrats will have little incentive to campaign for tough fiscal choices in the midterm elections and beyond, as Republicans have had great political success in avoiding tough fiscal choices. Ironically, the Democratic Party’s most vocal advocate of fiscal sanity these days is Democratic Socialist Mayor Zoran Mamdani, who recently proudly proclaimed that New York City is making progress in balancing its budget.
But it’s easier in places where state law requires balanced budgets. Vice President Kamala Harris’ short-lived 2024 campaign did not commit to spending restraint plans or even propose some tax increases. Democratic candidates in 2028 will be under intense pressure to be more aggressive on government spending and more fiscally conservative.
Cutting immigration payments will not solve the budget deficit. And the problem will not go away until the debt crisis reaches a point where taking medicine is less painful than being sick. Whether Stephen Miller knows it or not, his comments on Tuesday make it a little more likely.
