Washington:
Confronted with the threat of trillion-dollar-plus deficits for as far as the eye can see, President Donald Trump is offering a USD 4.8 trillion budget plan for the upcoming fiscal year that rehashes previously rejected spending cuts while leaving Social Security and Medicare benefits untouched.
Trump’s fiscal 2021 budget plan, to be released Monday, isn’t likely to generate a serious Washington dialogue about what to do, if anything this election year, about entrenched fiscal problems that have deficits surging despite a healthy economy.
The new budget, according to senior administration aides and a copy of summary tables, sees a USD 1.08 trillion budget deficit for the ongoing budget year and a USD 966 billion deficit gap in the 2021 fiscal year starting Oct. 1.
The budget’s most significant policy prescriptions an immediate 5% cut to non-defense agency budgets passed by Congress and USD 700 billion in cuts to Medicaid over a decade are nonstarters on Capitol Hill.
But the Trump budget is a blueprint written as if Trump could enact it without congressional approval. It relies on rosy economic projections and fanciful claims of future cuts to domestic programs to show that it is possible to bend the deficit curve in the right direction.
House Speaker Nancy Pelosi said that once again the president is showing just how little he values the good health, financial security and well-being of hard-working American families. Year after year, President Trump’s budgets have sought to inflict devastating cuts to critical lifelines that millions of Americans rely on,” she said in a statement.
Americans’ quality, affordable health care will never be safe with President Trump.
The budget would reduce the deficit to USD 261 billion within a decade if enacted in its entirety and promises balance after 15 years. Trump’s budget blueprint also assumes 2.8 per cent economic growth this year and growth averaging 3 per cent over the long term.
The reality is that no one Trump, the Democratic-controlled House or the GOP-held Senate has any interest in tackling a chronic budget gap that forces the government to borrow 22 cents of every dollar it spends.
Trump’s reelection campaign, meanwhile, is focused on the economy and the historically low jobless rate while ignoring the government’s budget.
On Capitol Hill, Democrats controlling the House have seen their number of deficit-conscious Blue Dogs shrink while the roster of lawmakers favoring costly Medicare for All and Green New Deal proposals has swelled.
Tea party Republicans have abandoned the cause that defined, at least in part, their successful takeover of the House a decade ago.
Trump has succumbed to the Washington temptation to deliver spending increases and tax cuts first and then deal or not with their impact on the deficit. Trump and key administration figures such as Treasury Secretary Steven Mnuchin had promised that Trump’s signature cuts to corporate and individual tax rates would pay for themselves; instead the deficit spiked by more than $300 billion over 2017 to 2019, falling just short of $1 trillion.
Trump has also signed two broader budget deals worked out by Democrats and Republicans to get rid of spending cuts left over from a failed 2011 budget accord. The result has been eye-popping spending levels for defense to about USD 750 billion this year and comparable gains for domestic programs favoured by Democrats.
Trump’s budget violates last year’s spending accord with an immediate USD 37 billion cut to non-defense programs appropriated by Congress each year, including a USD 2.4 billion, 27 per cent cut to the Environmental Protection Agency and a 13 per cent cut to the Department of Transportation. The Department of Veterans Affairs, would win a 13 per cent budget boost.
The White House hasn’t done much to draw attention to this year’s budget release, though Trump has revealed initiatives of interest to key 2020 battleground states, such as an increase to USD 250 million to restore Florida’s Everglades and a move to finally abandon a multibillion-dollar, never used, nuclear waste dump that’s political poison in Nevada.
The White House also leaked word of a USD 25 billion proposal for “Revitalizing Rural America” with grants for broadband Internet access and other traditional infrastructure projects such as roads and bridges.
The Trump budget also promises a USD 3 billion increase to USD 25 billion for NASA in hopes of returning astronauts to the moon and on to Mars. It contains a beefed-up, 10-year, USD 1 trillion infrastructure proposal, a modest parental leave plan, and a 10-year, USD 130 billion set-aside for tackling the high cost of prescription drugs this year.
Trump’s U.S.-Mexico border wall would receive a $2 billion appropriation, more than provided by Congress but less than the $8 billion requested last year. Trump has enough wall money on hand to build 1,000 miles of wall, most of it obtained by exploiting his budget transfer powers.
Trump took to Twitter on Saturday to promise voters that his budget will not be touching your Social Security or Medicare in keeping with his longstanding 2016 campaign promise.
Trump had made a bit of a stir last month at a meeting of global economic elites in Davos, Switzerland, when he told a CNBC interviewer that at some point he would consider curbs to popular benefit programs like Medicare and Social Security.
