It looks like the Trump administration's first comprehensive budget for the coming year will contain major spending increases for defense and draconian cuts in domestic programs.
Details of the president's more than $4 trillion fiscal 2018 budget plan set for release on Tuesday began leaking out late last week.
According to an Office of Management and Budget fiscal 2018 budget plan spreadsheet obtained by Third Way on Friday, the administration will seek to eliminate the Social Service Block Grant, a $2 billion program that helps help low-income families; zero out $3 billion of heating assistance for the poor; and cut funding for substance abuse and mental health treatment by 20 percent.
The proposed budget would also raid funding for student financial aid, cut the National Science Foundation funding by more than ten percent and eliminate the budget for the Corporation for Public Broadcasting.
While the president could eventually get a substantial portion of the funding he is seeking for defense, national security and other signature programs, the Republican-controlled Congress will likely push back on the tens of billions of dollars in cuts in domestic programs that enjoy broad bipartisan support.
In March, Trump tried to force Congress into making deep cuts in the Environmental Protection Agency, the National Institutes of Health, the State Department, the Department of Housing and Urban Development and an array of other agencies as part of a major spending package approved to keep the government operating through Sept. 30, but those efforts were roundly rejected.
White House budget officials told reporters late last week that the president will be seeking more deep cuts in domestic programs and social safety-net programs like food stamps, low income energy assistance and other anti-poverty programs as part of a larger effort to wipe out the deficit within ten years.
However, the president won't be playing from a position of strength in light of the mushrooming scandal over Trump's apparent efforts to derail the FBI probe of possible collusion between the Russians and Trump's 2016 presidential campaign organization.
The centerpiece of the budget will be Trump's call for a $54 billion increase in defense spending next year as a major down payment on the president's vow to expand and modernize the military and U.S. nuclear defenses. Trump at one time promised an "historic" buildup of the military, with more troops and military hardware. The money would go in part to increase troop strength by 56,000, with almost half going to the Army.
Experts say Trump's proposed 2018 total defense baseline of $603 billion falls well short of the early stages of the Reagan-era military buildup, and it is only modestly more than levels proposed by the former Obama administration. The Pentagon is also reportedly seeking separate overseas contingency operations funding for ongoing military operations in Afghanistan and Iraq of $64.5 billion.
Trump will request a total of $2.6 billion for border security, according to The New York Times, with most of that money going towards materials and planning to begin building a wall along the border with Mexico and related work that experts say could cost as much as $26 billion before it is completed. Trump once vowed to force the Mexican government to pay for the wall, but he has backed away from that pledge more recently and is now demanding that it be financed with U.S. taxpayers' dollars.
The president's budget will also propose $200 billion for infrastructure construction over the coming decade, Bloomberg reported, as part of an effort to bolster private, state and local spending on job-generating projects. Trump campaigned on a pledge of spending $1 trillion on infrastructure over the next decade, but he has yet to offer a plausible plan for financing the construction of new highways, bridges, railways and airports.
Federal budget watchdogs and other critics warn that the Trump budget is likely to be loaded with gimmicks to mask the true cost of the president's initiatives and exaggerate economic growth forecasts in computing long term deficits.
The government finished the last fiscal year with a $587 billion deficit. The new administration claims it can obliterate the deficit through a combination of steep cuts in certain means-tested entitlement programs, other savings and robust economic growth to help drive up federal tax revenues.
The White House is projecting that the economy will grow at a rate of 3 percent annually by 2021, according to The Wall Street Journal, arguing that its proposed tax cuts and regulatory relief will spur economic growth and leave the federal coffers flush with new tax revenues.
However, the non-partisan Congressional Budget Office, no stranger to Republican supply side economics, in January projected just 1.9 percent average growth in the gross domestic product through 2027, absent some significant change in fiscal policy.
The Committee for a Responsible Federal Budget last week urged the administration to reject "rosy scenarios" and other budget gimmicks to be credible. As for the administration's 3 percent growth projection, CRFB analysts said that "with an aging population, achieving that level of growth would be quite unlikely and would require a heroic mix of smart policy and very good luck."
Top Reads from The Fiscal Times