Trump’s $4.8 trillion budget proposal to revisit rejected cuts

US president Donald Trump is offering a $4.8 trillion (£3.7tn) election-year budget plan that recycles previously rejected cuts to domestic programs to promise a balanced budget in 15 years – all while boosting the military and leaving social security and Medicare benefits untouched.

Mr Trump’s fiscal 2021 plan released yesterday promises the government’s deficit will crest above $1tn only for the existing budget year before steadily decreasing to more manageable levels.

The plan has virtually no chance, even before Mr Trump’s impeachment scorched Washington. Its cuts to food stamps, farm subsidies, Medicaid and student loans couldn’t pass when Republicans controlled Congress, much less now with liberal House Speaker Nancy Pelosi setting the agenda.

Ms Pelosi said Sunday night 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.

Mr Trump’s budget would also shred last year’s hardwon budget deal between the White House and Ms Pelosi by imposing an immediate 5 per cent cut to non-defence agency budgets passed by Congress.

Slashing cuts to the Environmental Protection Agency and taking $700 billion out of Medicaid over a decade are also non-starters on Capitol Hill, but both the White House and Democrats are hopeful of progress this spring on prescription drug prices.

The Trump budget is a blueprint written as if he could enact it without congressional approval. It relies on rosy economic projections of 2.8 per cent economic growth this year and 3 per cent over the long term – in addition to fanciful claims of future cuts to domestic programs – to show that it is possible to bend the deficit curve in the right direction.

That sleight of hand enables Mr Trump to promise to whittle down a $1.08tn budget deficit for the ongoing budget year and a $966bn deficit gap in the 2021 fiscal year starting 1 October to $261bn in 2030. Balance would come in 15 years.

The reality is that no-one – Mr 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.

The White House plan proposes $4.4tn in spending cuts over the coming decade.