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Trump Plan Balloons U.S. Deficits

  • President Donald Trump speaks in the State Dining Room of the White House in Washington, Monday, Feb. 12, 2018, during a meeting with state and local officials about infrastructure. (AP Photo/Carolyn Kaster)

  • The President's FY19 Budget is on display after arriving on Capitol Hill in Washington, Monday, Feb. 12, 2018. (AP Photo/Susan Walsh)

  • File- This Jan. 22, 2018, file photo shows Director of the Office of Management and Budget Mick Mulvaney talking during a television interview outside the White House in Washington. Mulvaney, the former tea party congressman who runs the White House budget office, said Sunday, Feb. 11, 2018, that Trump’s new budget, if implemented, would tame the deficit over time, though unlike last year’s submission, it wouldn’t promise to balance the federal ledger eventually. (AP Photo/Carolyn Kaster, File)

  • James Knable helps to unpack copies of the President's FY19 Budget after it arrived at the House Budget Committee office on Capitol Hill in Washington, Monday, Feb. 12, 2018. (AP Photo/Susan Walsh)

  • In his image provided by NASA, acting NASA Administrator Robert Lightfoot discusses the fiscal year 2019 budget proposal during a State of NASA address, Monday, Feb. 12, 2018, at NASA's Marshall Space Flight Center in Huntsville, Ala. (Bill Ingalls/NASA via AP)



The Washington Post
Tuesday, February 13, 2018

Washington —The White House on Monday offered a $4.4 trillion budget plan that brought into sharp focus the fiscal strains created by the Trump administration and Congress in the past year, revealing how large tax cuts and a new spending agreement are driving up government debt.

President Donald Trump’s budget plan included proposals to slash spending on social safety net programs such as Medicare, Medicaid and food stamps, but these changes would still fall far short of balancing the budget and eliminating the deficit, a long-held GOP goal.

The White House projected the deficit would swell to near $1 trillion annually in 2019 and 2020 because of the new tax law and last week’s agreement to add $500 billion in new spending.

“Does it balance? No, it doesn’t,” White House Office of Management and Budget Director Mick Mulvaney told reporters on Monday. “I probably could have made it balance, but you all would have rightly absolutely excoriated us for using funny numbers because it would have taken funny numbers do to it.”

He placed the majority of the blame on Congress, saying lawmakers simply refused to cut spending.

The worsening fiscal picture has put enormous pressure on Congress to try to reconcile Trump’s call for even more spending on infrastructure and border security with long-held promises of wiping out the deficit over 10 years. As the growing deficit pushes debt levels beyond $20 trillion, rising interest rates are making it more expensive for the Treasury Department to borrow money.

But the White House and Congress have shown little willingness to cut back on spending, finding it easier to cut taxes and increase spending during Trump’s presidency.

Trump’s budget plan included a number of other initiatives that senior aides hope will be considered as budget talks continue this year.

The proposal includes new measures to speed up approvals for generic drugs, something the White House believes will cut spending at Medicare and Medicaid. And it called for cutting the Supplemental Nutrition Assistance Program, commonly known as food stamps, by 20 percent in 2019 and even more in the following years. It would do this in part by requiring many beneficiaries to accept food deliveries in addition to financial assistance, a change the White House believes will improve nutrition quality and cut back on costs.

Democrats were unanimous in scorching Trump’s budget proposal and saw it as a blueprint they could use to attack Republicans going into the midterm elections.

“He slashes education, environmental protection and Medicare and Medicaid,” Senate Minority Leader Chuck Schumer, D-N.Y., said on the Senate floor. “While corporations reap billions in tax giveaways, older Americans now have to worry about the Trump administration cutting Medicare and Medicaid. It’s in his budget.”

“The Trump administration should have no illusions about its budget becoming law,” he said. “It won’t.”

Rep. John Yarmuth, of Kentucky, the top Democrat on the House Budget committee, said that while the deficit and debt are “pretty bewildering” to the average voter, Democrats would be pointing to the GOP’s record on those issues heading into the midterms, particularly in relation to last year’s tax bill that added $1.5 trillion to the debt.

“I think we will certainly talk about the deficit and the connection to the tax bill. I don’t think there’s any question about that,” Yarmuth said.

“It’s an interesting role reversal,” he said.

The budget sent conflicting signals, calling for both increases and reductions in spending at a time when Congress appears less inclined to take direction from the White House on economic matters.

For example, the plan proposed cutting the Environmental Protection Agency’s budget by more than 20 percent just a few days after Congress agreed to add money to the EPA’s budget.

The Trump budget also proposed adding more money to the National Institutes of Health one year after the White House called for big cuts to that agency. Mulvaney said at the briefing that he had learned a lesson from some of the cuts he offered last year, adding that Congress “pounded the hell out of me.”

One reason White House officials believe their spending cut proposals will have little traction is because lawmakers agreed last week to boost spending levels over the next two years by $500 billion, boosting military and domestic programs to meet priorities of both Democrats and Republicans.

Mulvaney said on Monday that many of the White House’s proposals to ratchet back spending likely would be ignored by lawmakers, but he said it was important to specify the administration’s priorities as budget discussions begin.

Congress typically is unwilling to tackle tough legislation in an election year, and Capitol Hill looks unlikely to be fertile ground for any presidential initiative in the months ahead. The deep safety net cuts in Trump’s budget may play to his base, but they will go nowhere in the Senate, where support would be needed from Democrats.

The budget calls for $716 billion in defense spending spread across a number of federal agencies in 2019, a 13 percent increase from 2017 levels, as part of a costly effort to retool the military to deter and, if necessary, fight major powers such as Russia and China.

Defense Secretary Jim Mattis, who was flying to Rome for defense ministerial meetings, described the budget as “quite an achievement for the president” that will return the United States to a “position of primacy.”

The Trump plan provides more money for just about everything a general or admiral might desire. Some of the additional money, including $70 million for training of sailors and new ship equipment, is being set aside to fix pressing needs. Navy ships have been involved in a series of deadly accidents at sea in the past year.

Trump has spoken often about the need to modernize the nuclear arsenal to ensure that the United States remains “the most powerful nation in the world.” The current budget sets aside $24 billion for all three of the legs — submarine-carried, land-based and air-launched — of America’s nuclear triad.

To put Eastern European allies at ease and deter Russia, Trump’s budget request includes more than $6.3 billion for a multiyear program that will send additional combat equipment to places such as Poland and Estonia.

The budget also seeks $13 billion over the next two years to combat opioid addiction and $18 billion for the construction of a wall along the Mexico border.

But it proposes big cuts on spending in other areas, particularly health and welfare programs.

Trump’s budget calls for cutting federal Medicaid funding by $250 billion over the next 10 years by repealing the Affordable Care Act and giving states more flexibility to bring down health costs. It also would cut more than $200 billion from Medicare spending, though White House officials cautioned that this was meant to target what it believes are overpayments and would not lead to a reduction in benefits.