Matthew Jensen is developing important tools to help guide economic policy in Washington, DC. He is director of fiscal and regulatory analysis at the Center for American Prosperity, the economic brain trust at the America First Policy Institute. With experience in government oversight, regulatory modeling, and economic forecasting, Jensen has already played an important role in shaping the Tax Cuts and Jobs Act of 2017 and the federal government’s fiscal response to the COVID-19 pandemic.
His current focus is on developing open-source economic models to guide policy deliberations, and in ways that allow policy makers to challenge decades-long assumptions that often prove to be wrong. His work is increasingly called upon by congressional leaders who use the open source approach to challenge traditional government models provided by institutions such as the Congressional Budget Office–none of which buy into the traditional academic requirement to show their work.
Jensen expresses concern about the nation’s current fiscal trajectory. “Spending has outpaced revenues significantly because of overactive spending in the policymaking establishment,” he says, adding that until recently, there was little political will to address the growing deficit.
The United States now faces an urgent need for significant budgetary adjustments. “You’ve got a $2 trillion gap,” he says, referring to the discrepancy between annual government revenues and outlays. “And it’s supposed to get bigger and bigger. By the end of this budget window, it’s going to be about $2.5 trillion.”
For Jensen, the solution lies in a combination of spending cuts, tax reforms, and deregulation. While some policymakers argue that spending reductions alone won’t be sufficient, Jensen emphasizes that “growth and deregulation” are essential components of fiscal recovery. “If you can get this economy going again, if you can free the American people to pursue their dreams, then the American people have shown for decades that they are resilient,” he says. “They innovate when they’re given personal liberty and personal freedom.”
Based on his modeling, Jensen points to excessive federal regulations as a major drag on economic growth. He describes recent regulatory expansion as “unprecedented,” noting that direct regulatory costs have grown from $2.25 trillion to over $4 trillion annually. “That is an astonishing figure,” he says.
He describes the 15% annual cost increases from new regulations during the Biden Administration as “unprecedented in the modern era.” These costs, he explains, directly affect government spending as well. “Regulations drive up procurement costs for the federal government–they reduce economic activity, which in turn affects revenue,” he says.
Jensen argues that addressing regulatory burdens should be a priority in the ongoing budget reconciliation process. “The reconciliation process is flexible enough to accommodate major policy changes,” he says. “It allows for tax cuts, spending cuts, and even discretionary spending reductions.” In his view, lawmakers should use the opportunity to support President Trump’s renewed economic agenda. “We have a Republican Party that ran on supporting his agenda,” he says. “That agenda includes the greatest deregulation effort ever, the greatest middle-class tax cut ever, and massive spending cuts.”
Reflecting on the success of the Tax Cuts and Jobs Act (TCJA), Jensen credits open-source modeling and transparency for helping shape the legislation into a broad-based tax cut. “During the development of the bill, even The New York Times, The Washington Post, and CNN were using open-source models to show household-by-household benefits,” he says. “That transparency helped lawmakers improve the bill, making it an even bigger tax cut for more people.”
Jensen also stresses the importance of making government data more accessible while safeguarding individual privacy. He draws parallels to the open-source movement in software development, where transparency has generated trillions of dollars in economic value. “Now you have all these people who are technically savvy, who understand data and transparency, coming to government and saying, ‘Hey, why isn’t this available to the public?’” he says.
However, he cautions against exposing sensitive personal data. “Government is so entwined in our lives that when you start to make it more transparent, you have to be really careful not to make everything else transparent too.”
For Jensen, reducing government overreach is not just about cutting costs—it’s about empowering individuals. “Now’s the time to build things, to unleash creativity,” he says. “The government is starting to get out of the way. We have this opportunity right now.” His advice to Americans? “Go have babies. I have a baby at home, and it’s the best thing ever,” he says with a laugh.
Jensen intends to go further with his work on economic reforms. “We have to be better at coordinating our efforts on regulatory issues,” he says. “If we don’t address these fiscal and regulatory challenges, the burden on future generations will only grow.”
His goal is economic freedom and prosperity for every American. “We need to cut spending, reduce regulations, and give the American people the tools they need to succeed,” he says. “That’s how we get America back on track.”
