White House Deputy Chief of Staff Stephen Miller speaks with members of the press outside the West Wing of the White House in Washington, Aug. 29, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images
The U.S. national debt grew past 100% of gross domestic product last month, putting the country on the path to beat the record of 106% of GDP set in 1946, coming out of World War II. That record is on pace to shatter around 2029, just as Donald Trump’s presidency is ending, the nonpartisan Congressional Budget Office estimates.
Deputy White House Chief of Staff Stephen Miller has identified a culprit for what might otherwise be a grim legacy.
“I believe based on what I’ve seen and what I’ve heard is that we could balance the federal budget if the only dollars that went out of the Treasury went to individuals who were properly lawfully correctly eligible to receive them,” Miller said at a Trump administration anti-fraud event Tuesday.
Miller’s figures far overstate the federal government’s published estimates for misspent funds, and overlook that immigrants generally help improve, not worsen, the budget deficit. But the problem isn’t just misleading math. The Trump administration’s inability to take the deficit seriously is worsening Americans’ affordability crisis 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 revenue and what it spends. That adds to the federal debt.
Miller was building on his prior comments that put the nation’s spending problems at the feet of immigrants who are in the U.S. illegally, don’t buy into the American system, or both. Stolen or otherwise misappropriated benefits have “fleeced” taxpayers of hundreds of billions of dollars, Miller said Tuesday, or even trillions, as he put it in March.
The administration’s fraud task force is every day “uncovering levels of fraud across various federal programs that were previously inconceivable to government forecasters and working Americans alike,” White House spokesman Kush Desai said when asked about Miller’s statements.
“The extraction of wealth from American taxpayers to people who don’t belong here is the primary 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 unbalanced spending in the decades since President Bill Clinton briefly managed to balance the budget in the 1990s. But recent years have seen a sharp acceleration of debt-financed spending. Trump slashed taxes in his first term, only to begin a Covid spending frenzy that culminated in a vast stimulus package under President Joe Biden. That spending staved off a recession at the cost of overheating the economy, contributing to the inflation that still plagues Americans.
Treasury Secretary Scott Bessent said before being picked for that job that he wanted Trump to get the deficit to less than 4% of GDP by the end of his term. There is still time, but the trajectory doesn’t look good. The deficit ran to 5.8% of GDP in the 2025 fiscal year, which ended in September, according to the CBO, or about $1.8 trillion.
Are illegal immigrants to blame? If so the government’s investigators haven’t seen it. Federal inspectors general reported $186 billion in improper payments last year, or about 10% of the deficit, according to the nonpartisan Government Accountability Office. Those figures don’t capture all the fraud, but they do capture some payments that were overstated but weren’t completely misdirected.
Democrats and Republicans have argued for years about whether it is possible to shrink the deficit purely by reducing waste, fraud or abuse.
Miller’s argument is difficult to disprove. It is possible fraudsters are stealing vast sums under the hapless noses of federal bureaucrats. It happens. The improper payment data may add up to $3 trillion since 2003, the GAO found, or less than two years’ worth of deficits at the current rate.
But Americans will suffer if fear of suspected fraud is used to cut back on immigration. That’s because immigrants don’t drain federal budgets, they buffer them, researchers at the libertarian Cato Institute found. Immigrants added $14.5 trillion to the fiscal bottom line over 30 years, from 1994 to 2023, according to a Cato Institute white paper. They tend to receive less from Social Security and Medicare than other Americans, both because they have less work history in the U.S. and because some are ineligible as undocumented immigrants. They also tend to receive less public schooling because they arrive later in life, among other explanations.
What is driving up the deficit? Americans as a whole are getting older, and it is therefore more expensive to provide for their retirement and healthcare. Meanwhile the debt compounds, contributing to interest payments that now outstrip the annual cost of the military.
There is no magic number at which debt becomes too much. And unlike a business or a household, the government’s debts are dominated in the dollars that it prints, so it can’t default. States must balance their budgets, but there’s no such requirement for the federal government.
Debt isn’t free. The U.S. government is adding so much of it every year that it isn’t clear there will always be buyers for it via government bonds at prices Americans will want to pay.
Bond managers’ worries have real effects on Americans. The yield on the 10-year Treasury note determines what consumers pay for mortgages, auto loans, credit cards and other debt. It was at 4.3% the day after Trump won the 2024 election. Bessent has said he looks to the 10-year as a barometer of the administration’s success.
But the 10-year remains above where it was when Trump won. It has fallen about 20 basis points, or hundredths of a percent, to just below 4.5% midday Wednesday as traders have digested the possibility that the Iran war will end soon, easing their inflation worries. But there is a floor under those yields, too, set in part by the U.S. government’s plans to issue unending new quantities of debt.
None of this would be such a problem if there were any prospect for a bigger-picture fix. But the second Trump administration has repeatedly used the deficit as a cudgel to attack its perceived opponents, making any kind of compromise far less likely. Elon Musk’s abortive Department of Government Efficiency cut little waste and alienated potential allies who were excited about the prospect of a serious reform effort.
Democrats will see little incentive to campaign in the midterms or beyond for tough fiscal choices, when Republicans have found so much political success in avoiding them. Ironically, the Democrats’ loudest voice for fiscal sanity lately has been democratic socialist Mayor Zohran Mamdani, who recently proudly proclaimed making progress at balancing New York City’s budget.
But that’s easier in a place where state law requires balanced budgets. Vice President Kamala Harris’ brief campaign in 2024 didn’t commit to a restrained spending plan and even offered to raise some taxes. Democrats’ 2028 candidates will face intense pressure to be far more aggressive with government spending and even less fiscally conservative.
The deficit can’t be fixed by cutting payments to immigrants. And it won’t be fixed until the debt crisis reaches a level that makes taking the medicine less painful than the disease. Whether or not Stephen Miller knows that, his comments Tuesday make it a little more likely.