Trump Budget: More for the Military, Less for the Poor
The government hasn't seen a surplus since 2001
WASHINGTON (AP) – President Donald Trump on Tuesday sent Congress a $4.1 trillion federal spending plan that promises faster economic growth and steep cuts to programs for the poor in a bid to balance the government’s books over the next decade.
The proposed 2018 budget immediately came under attack by Democrats, and even some GOP allies deemed it a non-starter. The proposal is laced with $3.6 trillion in cuts to domestic agencies, food stamps, Medicaid, highway funding, crop insurance, and medical research, among others.
At the same time, the blueprint boosts spending on the military by tens of billions and calls for $1.6 billion for a border wall with Mexico that Trump repeatedly promised voters the U.S. neighbor would finance. Mexico emphatically rejects that notion.
Budget experts, Democrats and Republicans challenged the economic assumptions of the White House and Budget Director Mick Mulvaney.
During the campaign, Trump attacked the weak economic growth of the Barack Obama years, and pledged that his economic program would boost growth from the lackluster 2-percent rates seen since the recovery began in mid-2009. Trump’s new budget is based on sustained growth above 3-percent, sharply higher than the expectations of most private economists. Without more than $2 trillion in such “economic feedback” over the coming decade, the budget would never reach balance and would run a deficit of almost $500 billion.
“Three percent, I’m not seeing how you get there mathematically,” said Rep. Mark Sanford, R-S.C. “I think realism in the way we forecast number is part and parcel to a constructive budget process.”
The proposal projects that this year’s federal deficit will rise to $603 billion, up from the actual deficit of $585 billion last year. But the document says if Trump’s initiatives are adopted the deficit will start declining and actually reach a small surplus of $16 billion in 2027. However, that goal depends not only on the growth projections that most economists view as overly optimistic, but also a variety of accounting gimmicks, including an almost $600 billion peace dividend from winding down overseas military operations.
The government hasn’t run a surplus since 2001, and deficits spiked during former President Barack Obama’s first term in the aftermath of the Great Recession.
“Through streamlined government, we will drive an economic boom that raises incomes and expands job opportunities for all Americans,” Trump said in his budget message. His budget is titled, “The New Foundation for American Greatness.”
Democrats had an opposite interpretation.
“In the America of President Trump’s budget, children, working families, seniors, and people with disabilities will be ‘fined,’ while the wealthiest Americans will get a ‘bonus.’ What’s so ‘great’ about that America?” asked Sen. Dick Durbin of Illinois.
Food stamp cuts would drive millions from the program, while a wave of Medicaid cuts could deny nursing home care to millions of elderly poor people.
“Isn’t it reasonable to at least ask the question, ‘Are there people on that program who shouldn’t be on there?'” Mulvaney asked.
The budget does feature a handful of domestic initiatives, including a six-week paid parental leave program championed by Trump’s daughter, Ivanka. Some $200 billion in federal infrastructure investments are promised to leverage another $800 billion in private investment.
Trump would keep campaign pledges to leave core Medicare and Social Security benefits for the elderly alone, but that would translate into even deeper cuts in programs for the poor such as Medicaid and food stamps.
Medicaid, the government insurance program for the poor and many disabled Americans, would be cut by more than $600 billion over 10 years by capping payments to states and giving governors more flexibility to manage their rosters of Medicaid recipients. Those cuts go on top of the repeal of Obamacare’s expansion of the program to 14 million people and amount to, by decade’s end, and almost 25-percent cut from present projections.
Likewise, a 10-year, $191 billion reduction in food stamps – almost 30-percent – far exceeds prior proposals by Capitol Hill Republicans. The food stamp program serves about 42 million people.
“These cuts that are being proposed are draconian,” said veteran GOP Rep. Harold Rogers, who represents a poor district in eastern Kentucky. “They’re not mere shavings, they’re deep, deep cuts.”
Other cuts in Trump’s budget include reductions in pension benefits for federal workers, in part by requiring employees to make higher contributions. In agriculture, the proposed budget would limit subsidies to farmers, including for purchasing crop insurance, a move already attacked by farm state lawmakers.
On taxes, Trump promises an overhaul that would cut tax rates but rely on economic growth and erasing tax breaks to avoid adding to the deficit. There would be three tax brackets – 10-percent, 25-percent, and 35-percent – instead of the current seven, and there’ a promise to lower the corporate tax rate to 15-percent.
But the budget has virtually no detail to prove it would deliver on Trump’s promise for “massive” tax cuts.