Budget sets up a contrast with Trump’s Democratic rivals as it slashes safety net programs
The White House on Monday proposed a $4.8 trillion election-year budget that would slash major domestic and safety net programs, setting up a stark contrast with President Trump’s rivals as voting gets under way in the Democratic presidential primary.
The budget would cut Medicaid and the Children’s Health Insurance Program and also wring savings from Medicare despite Trump’s repeated promises to safeguard Medicare and Social Security.
It takes aim at domestic spending with cuts that are sure to be rejected by Congress, including slashing the Environmental Protection Agency budget by 26.5 percent over the next year, and cutting the budget of the Health and Human Services department by 9 percent. HHS includes the National Institutes of Health and the Centers for Disease Control and Prevention, which will see a budget cut even as the coronavirus spreads — although officials said funding aimed at combating the coronavirus would be protected.
The budget is a proposal to Congress, and lawmakers have mostly rejected the White House’s proposed cuts in the past. Still, the budget plan sets up the Trump administration’s policy priorities heading into the November elections and are likely to draw scrutiny in Washington and on the campaign trail.
It would target the Education Department is for a nearly 8 percent cut, the Interior Department would be cut 13.4 percent, and the Housing and Urban Development department would be cut 15.2 percent. The State Department and U.S. Agency for International Development would be cut by 22 percent.
The proposed cuts stand in contrast to proposals by major Democratic candidates to expand environmental, education and health care spending, setting up a clash between Trump and his 2020 rivals over their major campaign priorities.
Not all agencies would face cuts, though. Trump proposes to increase spending for the Department of Homeland Security, while keeping Pentagon spending mostly flat. The National Aeronautics and Space Administration budget would increase by 12 percent as Trump has said he wants the agency to prepare for space travel to Mars.
Even with all the proposed spending cuts, the budget would fail to eliminate the federal deficit over the next 10 years, missing a longtime GOP fiscal target. Instead, White House officials plan to say their budget proposal would close the deficit by 2035.
But it would only achieve this if the economy grows at an unprecedented, sustained 3 percent clip through 2025, levels the administration has failed to achieve for even one year so far. The U.S. economy grew 2.3 percent in 2019, the weakest level since Trump took office.
During Trump’s first year in office, his advisers said their budget plan would eliminate the deficit by around 2028. This new budget will mark the third consecutive time that they abandon that 10-year goal and instead suggest a 15-year target.
This new trend shows how little progress the White House is making in dealing with ballooning government debt, something GOP party leaders had made a top goal during the Obama administration. Trump’s first budget projected the deficit in 2021 would be $456 billion. Instead, it is projected to be more than double that amount.
Trump has shown little interest in dealing with the deficit and debt, though some GOP leaders say it remains a priority. The $4.8 trillion budget for 2021 would represent a $700 billion surge over levels from 2018.
White House officials have blamed congressional Democrats for inaction on the federal deficit. However, Trump has agreed to increase spending throughout the government because it was the condition on which Democrats accepted a higher military budget.
As a presidential candidate, Trump said he would eliminate not just the annual federal deficit but all debt held by the United States after eight years in office.
“Trying to balance the budget in 10 years is very difficult, so having a longer time horizon makes a lot of sense,” said Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, which advocates reducing the deficit. “Fifteen years is still very aggressive.”
The deficit is the gap between spending and revenue, and this year it is projected to breach $1 trillion for the first time since 2012. White House officials are expected to try to emphasize on Monday that their budget proposal would make progress toward reducing the deficit by 2030 but not eliminate the gap.
Trump’s budget aims to cut spending on safety-net programs such as Medicaid and food stamps, cutting food stamp spending by $181 billion over a decade. It proposes to squeeze hundreds of billions of dollars from Medicare over a decade through cost-saving proposals such as reforming medical liability and modifying payments to hospitals for uncompensated care.
The budget cuts Medicaid spending by about $920 billion over 10 years, a change Democrats and administration critics warn would lead to reductions in benefits and the number of people on the health care program.
A senior administration official defended the cut, noting it reflects a decrease in the rate at which Medicaid spending would grow rather than a reduction from current spending levels. The official said the administration would save money on Medicaid spending through new work requirements and recouping payments incorrectly spent by the federal government.
Liberal economists rejected that argument. “This is a budget that would cause many millions of people to lose health care coverage. That is unambiguous,” said Aviva Aron-Dine, a former Obama official and vice president at the Center on Budget and Policy Priorities, a left-leaning think-tank.
Democrats such as Rep. John Yarmuth (D-Ky.), chairman of the House Budget Committee, said early reports indicate the budget includes “destructive changes … while extending [Trump’s] tax cuts for millionaires and wealthy corporations.”
During the last year President Barack Obama was in office, the deficit was less than $600 billion, but it has grown significantly since then.
The 2017 GOP tax cuts and new domestic spending approved by bipartisan majorities in Congress have widened this gap markedly. However, the Trump administration’s new budget summary contains the line: “All administration policies will pay for themselves, including extending tax cut provisions expiring in 2025.”
Without action by Congress and the administration, tax cuts for families and individuals would expire at the end of 2025. Budget experts have projected that extending those tax cuts would reduce revenue by roughly $1 trillion.
The largest parts of the government’s budget are “mandatory” spending programs that are automatically renewed each year without congressional approval, such as Medicare, Medicaid and Social Security. Trump said on Twitter Saturday that the budget “will not be touching your Social Security or Medicare.” In 2015, he promised not to seek cuts to Medicaid as well, but his budgets have routinely sought big Medicaid changes that would cut roughly $800 billion from the program over 10 years.
Those proposals have not gained traction in Congress, however, and Trump has not fought for Congress to consider the changes as much as he’s battled over some of his other priorities.
The budget is expected to request $2 billion in homeland security spending for the southern border wall — billions less than in past years and billions less than Congress has agreed to. However, the administration has siphoned billions more from the Pentagon budget ever since declaring a national emergency at the border following last winter’s government shutdown.
Administration officials say the wall has moved into a new phase, focused on execution of the project now that funding for it has been secured. The budget document says the administration expects to have completed 400 miles of new border wall by the end of 2020.
“The president’s budget to fund the wall and border security [comes] with big increases for infrastructure, technology and law enforcement personnel,” said a senior administration official, who like others spoke on the condition of anonymity because the budget was not yet released. “This request is based on what’s required to gain operational control of the border.”
Overall, the budget proposes 5 percent net cuts in domestic discretionary spending, the category of government spending that covers agencies like HHS and the Education Department, but does not include Social Security or Medicare.
These proposed cuts fall well below spending caps that lawmakers and the administration already agreed to in a bipartisan budget deal for 2021. That all but ensures the budget will face bipartisan opposition on Capitol Hill.
The federal debt has already grown by about $3 trillion under Trump.