President Trump’s second budget will cut $3 trillion in spending over the next 10 years, White House officials indicated Sunday night, but won’t be balanced.
Instead of balancing the budget, the Trump administration will tout lowering the debt relative to the economy in its budget document, to be released Monday.
“As a nation, we face difficult times – challenged by a crumbling infrastructure, growing deficits, rogue nations, and irresponsible Washington spending,” Office of Management and Director Mick Mulvaney said in a statement Sunday evening. “Through this budget proposal, it is clear that the President and this Administration are determined to reverse these trends, and ensure greater prosperity for the hard-working American taxpayer.”
Last year’s Mulvaney-authored budget, for fiscal year 2018, did reach balance in the tenth year, through a combination of major cuts to safety net programs and domestic government programs — $3.5 trillion in cuts over 10 years altogether — and rosy assumptions about economic growth.
This year’s version won’t reduce spending by as much, with only about $3 trillion in spending cuts, according to the White House.
The president’s budget is not law or legislation. Congress sets government spending. Trump’s budget, to be named Efficient, Effective, Accountable: An American Budget, is officially a request to Congress and a statement of the administration’s priorities.
Conservatives for years have set a goal of balancing the budget on paper, and criticized President Obama for not reaching balance in his budget documents.
But that target fell out of reach in the last year, after Republicans enacted a $1.5 trillion tax cut and then struck a spending deal with Democrats to add around $320 billion to the deficit in the next two years.
Adding to the complications, balancing the budget in a 10-year timeframe is more difficult each year because more Baby Boomers begin taking retirement benefits in the later years in the budget.
Nevertheless, the country’s fiscal situation can be improved without balancing the budget. As long as the economy grows faster than the debt, the debt will shrink relative to the size of the economy.
Today, the federal debt held by the public is about 75 percent of the country’s gross domestic product, up from around 33 percent prior to the financial crisis. Last year’s budget claimed Trump’s plans would lower the debt below 60 percent of GDP.
On Sunday night, the Office of Management and Budget said that the fiscal year 2019 budget would also lower the ratio, but didn’t say by how much.
“Just like every American family, the Budget makes hard choices: fund what we must, cut where we can, and reduce what we borrow,” Mulvaney said in his statement. “It’s with respect for the hard work of the American people that we spend their tax dollars efficiently, effectively, and with accountability.”
Although the budget is sure to call for many sizable spending cuts, of the kind that Congress has demonstrated are not politically viable, it will also include spending increases for Trump’s pet projects.
For example, it will set aside $200 billion for the infrastructure program that Trump aims to pass with Democratic help.
Also, $23 billion is included for border security, with $18 billion earmarked for the wall on the southern border that Trump made the centerpiece of his campaign agenda.
The administration will also propose new spending on veterans’ benefits and on measures to combat the opioid crisis.
The budget is set to be released in full Monday morning.
The budget would include $200 billion in federal dollars that Trump hopes will spur $1.5 trillion in infrastructure spending among government and private sources during the next ten years.
According to a White House fact sheet, the budget includes some policy proposals that would cut federal regulations and allow projects to be built faster. The two-year budget deal agreed upon by congressional leaders last week could mean $21 billion to “jumpstart” the infrastructure plan, according to the outline.
Trump also wants $23 billion for border security and immigration enforcement. That is less than a group of Republican senators set to be introduced on Monday is proposing to spend as a part of a deal on the Deferred Action for Childhood Arrivals program, or DACA.
According to the White House, Trump wants to spend $782 million to hire 2,750 more law enforcement officers and agents at Customs and Border Protection and Immigration and Customs Enforcement.
The budget also proposes spending $2.7 billion to pay for 52,000 illegal immigrants to be held in federal custody at any one time.
Trump also wants to spend $85.5 billion to improve medical care for veterans.
The budget includes $17 billion to fight the opioid addiction crisis in the U.S. That includes $3 billion in new funding in 2018 and $10 billion in new funding in 2019.