Trump seeks to slash $3.6 trillion of spending in austere budget

WASHINGTON, (Reuters) - U.S. President Donald Trump asked lawmakers yesterday to cut $3.6 trillion in government spending over the next decade, taking aim at healthcare and food assistance programs for the poor in an austere budget that also boosts the military.

Republicans who control the U.S. Congress - and the federal purse strings - will decide whether to make politically sensitive cuts, and the proposal is unlikely to be approved in its current form.

Although it is not expected to survive on Capitol Hill, the proposal puts numbers on Trump’s vision of a government that radically cuts assistance to lower-income Americans.

The biggest savings would come from cuts to the Medicaid healthcare program for the poor, which are embedded in a Republican healthcare bill passed by the House of Representatives.

Trump wants lawmakers to cut at least $610 billion from Medicaid and more than $192 billion from food stamps over a decade. He seeks to balance the budget within 10 years.

The Committee for a Responsible Federal Budget, a nonpartisan policy organization, said the plan relied on gimmicks, unrealistic cuts and “rosy assumptions” of economic growth that would reach 3 percent annually by the end of Trump’s first term.

The Congressional Budget Office projects the economy to grow at an annual pace of 1.9 percent over that period. The White House said its proposed tax cuts would help fuel higher growth and pay for themselves by generating an additional $2 trillion in revenue over 10 years.

Lawrence Summers, a former economic adviser to Democratic President Barack Obama, said the Trump administration was double-counting that money by saying it would help close budget deficits while also offsetting the revenue lost by cutting tax rates.

“It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them,” Summers wrote in the Washington Post.

Mick Mulvaney, Trump’s budget office director, said his office made other assumptions that were probably too conservative. “We stand by the numbers,” he said.