White House Deputy Chief of Staff Stephen Miller speaks to members of the media outside the West Wing of the White House in Washington, Aug. 29, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images
America’s national debt grew past 100% of gross domestic product last month, putting the country on track to surpass the record of 106% of GDP set in 1946., coming out of World War II. That record will disappear around 2029, just as Donald Trump’s presidency ends, the nonpartisan Congressional Budget Office estimates.
White House Deputy Chief of Staff Stephen Miller has identified the culprit of what could be a bad legacy.
“I believe based on what I’ve seen and what I’ve heard that we can balance the federal budget if only the dollars that come out of the Treasury go to the people who are legally entitled to them,” Miller said at Trump’s anti-fraud event on Tuesday.
Miller’s figures far exceed the federal government’s published estimates of underutilized funds, and ignore the fact that immigrants often help improve, not worsen, budget deficits. But the problem is not just misleading statistics. The Trump administration’s inability to take this debt seriously is making Americans unaffordable today and threatening a debt crisis down the road. The deficit is the difference between what the federal government takes in from taxes and other revenues and what it spends. That adds to the government debt.
Miller built on him preconceived notions that lay the country’s spending problems at the feet of illegal immigrants in the US, consumers of the American system, or both. Stolen or misappropriated benefits have “escaped” taxpayers to the tune of hundreds of billions of dollars, Miller said Tuesday, or trillions, as he put it in March.
The administration’s anti-fraud task force is daily “revealing levels of fraud across government programs that were previously unimaginable to government forecasters and working Americans alike,” White House spokesman Kush Desai said when asked about Miller’s statements.
“The accumulation of wealth from American taxpayers to people who can’t be here is a major cause of the national debt,” Miller said alongside the president on March 16.
The national debt stands at $31.4 trillion. Presidents and members of Congress from both parties have committed to fiscal disproportionate spending in the decades since President Bill Clinton briefly managed to balance the budget in the 1990s. But recent years have seen a huge increase in debt financing. Trump cut taxes in his first term, just started using the Covid money that ended up with a massive stimulus package under President Joe Biden. That spending avoided recession at the cost of fueling the economy, contributing to the deflation that still plagues Americans.
Treasury Secretary Scott Bessent said before he was selected for the job that he wanted Trump to get the deficit below 4% of GDP by the end of his term. There is still time, but the trail is not clear. The deficit reached 5.8% of GDP in fiscal year 2025, which ended in September, according to the CBO, or about $1.8 billion.
Should illegal immigrants be blamed? If so, government investigators haven’t seen it yet. Federal auditors reported $186 billion in improper payments last year, or about 10% of the deficit, according to the nonpartisan Government Accountability Office. Those statistics don’t capture all fraud, but they do capture some payments that were overstated but not completely misdirected.
Democrats and Republicans have argued for years about whether it is possible to reduce the deficit by reducing waste, fraud or abuse.
Miller’s argument is difficult to refute. Fraudsters may be stealing large sums of money under the watchful eye of government officials. It happens. The inaccurate payment data may have totaled $3 billion since 2003, the GAO found, or less than a two-year deficit at current rates.
But Americans will suffer if fear of suspected fraud is used to reduce immigration. That’s because immigrants aren’t draining government budgets, they’re draining them, researchers at the libertarian Cato Institute found. Immigrants added $14.5 trillion to the economy over 30 years, from 1994 to 2023, according to a white paper from the Cato Institute. They tend to receive less from Social Security and Medicare than other Americans, both because they have less work history in the US and because some do not qualify as undocumented immigrants. And they tend to receive less public education because they arrive later in life, among other explanations.
What is increasing the deficit? Americans as a whole are getting older, so it is more expensive to provide for their retirement and health care. Meanwhile the debts are piling up, contributing to interest payments that now exceed the military’s annual expenses.
There is no magic number at which debt becomes too big. And unlike a business or a household, the government’s debt is controlled by the dollars it prints, so it cannot pay. States must balance their budgets, but there is no such requirement for the federal government.
Credit is not free. The US government adds so much every year that it is not clear that there will always be buyers for its government bonds at prices that Americans will want to pay.
The worries of bondholders have real consequences for the American people. The harvest on the 10-year Treasury The note determines what consumers pay for mortgages, car loans, credit cards and other debts. It was at 4.3% the day after Trump won the 2024 election. Bessent said he views 10 years as a barometer of management success.
But it’s 10 years longer than it was when Trump won. It fell nearly 20 points, or 100 percent, to less than 4.5% by midday Wednesday as traders digested the possibility that the war in Iran would end soon, easing their inflation concerns. But there’s a floor beneath those yields, too, set in part by the US government’s plans to issue endless new debt.
None of this would be a problem if there was an opportunity for a big picture fix. But Trump’s second administration has repeatedly used the deficit as a cudgel to attack its opponents, making any kind of compromise extremely unlikely. Elon Musk’s abortive Government Operations Department produced little debris and alienated potential allies who were excited by the prospect of a major reform effort.
Democrats will see little incentive to campaign during or beyond the tough fiscal choices, which Republicans have found great political success in avoiding. Ironically, the Democrats’ loudest voice on fiscal sanity recently has been social democrat Mayor Zohran Mamdani, who recently proudly announced progress on balancing New York City’s budget.
But that’s easy in an area where state law requires a limited budget. Vice President Kamala Harris’ short 2024 campaign did not commit to a moderate spending plan and even promised to raise taxes. The Democrats running for office in 2028 will face a lot of pressure to be more aggressive in spending and not just spending money.
The deficit will not be fixed by reducing immigration payments. And it won’t be fixed until the debt crisis reaches a level that makes taking the medicine less painful than the disease. Whether Stephen Miller knows it or not, his comments on Tuesday make it even more likely.
