WASHINGTON (AP) — Confronted with the threat of trillion-dollar-plus deficits for as far as the eye can see, President Trump is offering a $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, is not 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 $1.08 trillion budget deficit for the present budget year and a $966 billion deficit in the 2021 fiscal year starting Oct. 1.
The budget’s most significant policy prescriptions — an immediate 5% cut to nondefense agency budgets passed by Congress and $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 allegedly would reduce the deficit to $261 billion within a decade if enacted in its entirety and promises balance after 15 years. It assumes 2.8% economic growth this year and annual growth averaging 3% over the long term.
The reality is that no one — Trump, the Democratic-controlled House or the Republican-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 is focused on the economy and the low jobless rate, while ignoring the enormous budget deficit.
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 allegedly 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 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 from 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 — about $750 billion this year — and comparable gains for domestic programs favored by Democrats.
Trump’s budget violates last year’s spending accord, with an immediate $37 billion cut to nondefense programs appropriated by Congress each year, including a $2.4 billion, 27% cut to the Environmental Protection Agency and a 13% cut to the Department of Transportation. The Department of Veterans Affairs would get a 13% budget boost.
The White House hasn’t done much to draw attention to this year’s budget, though Trump has revealed initiatives of interest to key 2020 battleground states, such as an increase to $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 $25 billion proposal for “Revitalizing Rural America” with grants for broadband Internet access and traditional infrastructure projects such as roads and bridges.
The Trump budget also promises a $3 billion increase — to $25 billion — for NASA in hopes of returning astronauts to the moon and on to Mars. It contains a beefed-up, 10-year, $1 trillion infrastructure proposal, a modest parental leave plan, and a 10-year, $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 2016 campaign promise.
Trump made a bit of a stir in January 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 Medicare and Social Security.
“At the right time, we will take a look at that,” Trump said. “You know, that’s actually the easiest of all things.” After Saturday’s tweet, an administration official said, “Every current beneficiary will keep their benefits as the president has always promised.”
Trump proposed modest adjustments to eligibility for Social Security disability benefits and cuts to Medicare providers such as hospitals, but the real cost driver of Medicare and Social Security is the retirement surge of the baby boom-generation and health care costs that continue to outpace inflation.
With Medicare and Social Security largely off the table, Trump has focused on Medicaid, which provides care to more than 70 million poor and disabled people. President Barack Obama successfully expanded Medicaid when passing the Affordable Care Act a decade ago, but Trump has endorsed Republican plans — they failed spectacularly in the Senate two years ago — to dramatically curb the program.
Trump’s latest Medicaid proposal would allow states that want more flexibility in Medicaid to accept their federal share as a lump sum; for states staying in traditional Medicaid, a 3% cap on cost growth would apply. Trump would also revive a plan, rejected by lawmakers in the past, to cut food stamp costs by providing much of the benefit as food shipments instead of cash.
“This destructive and irrational president is giving us a destructive and irrational budget,” said House Budget Committee Chairman John Yarmuth, D-Ky. “The budget reportedly includes destructive changes to Medicaid, SNAP, Social Security, and other assistance programs that help Americans make ends meet — all while extending his tax cuts for millionaires and wealthy corporations.”