Northwest Arkansas Democrat-Gazette
Budget plan called ‘responsible’
Problem isn’t taxes, but Washington spending, official says.
WASHINGTON — President Donald Trump’s fiscal 2020 budget, which includes $1.1 trillion in deficit spending, is a “fiscally responsible and common-sense spending plan,” a White House official told the House Budget Committee on Tuesday.
Russell Vought, acting director of the Office of Management and Budget, portrayed Trump as a would-be budget cutter, undermined by a free-spending Congress.
“The president’s commitment to fiscal responsibility has been outlined in previous budgets, and again today he is requesting more reductions to both discretionary and mandatory spending than any other president in history,” Vought said.
“Yet each time this president has called for fiscal restraint and spending reform, he has been blatantly ignored,” Vought told committee members.
He also faulted President Barack Obama, at least in part, for the existing fiscal situation.
“The national debt nearly doubled under the previous administration and is now more than $22 trillion,” Vought said. “This level of debt is unsustainable and threatens the prosperity and economic freedom of future generations.”
Committee Democrats blamed the 2017 Republican tax cuts for the recent acceleration in deficit spending and accused the White House of cutting taxes for the wealthy while slashing programs for the poor.
During a nearly three-hour appearance, Vought defended the tax overhaul, saying it’s not the cause of the fast-rising deficit.
“The problem is not that America tax[es] too little, it’s that Washington spends too much,” he said.
He argued that the tax cuts would ultimately pay for themselves by fueling economic growth, which would lead to increased tax revenue.
Republicans on the committee, including U.S. Rep. Steve Womack, R-Ark., praised the president for addressing deficit spending and argued that budget cuts are necessary to curb what they view as out-of-control government expenditures.
“While there is still much work to do to put our spending back on a sustainable path, the president’s budget takes steps in the right direction,” the former Rogers mayor said. “Whereas, under current law, annual deficits are nearing $1 trillion annually in 2029, under this proposal, the annual deficit will be lowered [in 2029] to $202 billion.”
Despite anticipating four straight years of $1 trillion deficits and a decade of unbalanced budgets, Vought said he remains “hopeful that we can prove to the American people that their government is capable of balancing the budget by prioritizing efficient and effective spending.”
As a candidate, Trump told the Washington Post that he could balance the budget and pay off the debt within eight years.
Asked by the Arkansas Democrat-Gazette in February about his failure to rein in spending, Trump said deficit reduction had not been his top priority.
“We had to rebuild our military. Look, that’s more important than balancing the budget, which I can always do at the right time. And we had to rebuild many other things,” he said.
The administration now says it foresees a balanced budget by 2034; no revised date for paying off the debt has been announced.
In the fiscal 2020 budget, Trump has proposed raising military spending by 5 percent, from $716 billion in fiscal 2019 to $750 billion.
That is paired with cuts of 5 percent to non-military discretionary spending, Republicans say.
Democrats argue that the actual cuts would be closer to 9 percent.
Trump’s blueprint, if approved, would reduce spending from its current trajectory by $2.7 trillion over the next decade, Vought said.
U.S. Rep. John Yarmuth, the committee chairman, said Trump’s budget is “a recipe for American decline and relies on a patchwork of gimmicks, fantasy projections, and extreme cuts that forfeit any responsibility for the well-being of the American people and our nation. What this administration is saying to our constituents is that the federal government will no longer have a role in making sure we remain an opportunity-based society … that the American dream is out of reach.”
The cuts, he argued, are not only callous, but “malicious.”
“You can’t cut Medicare by a half a trillion dollars without knowing it will hurt our nation’s seniors. You can’t cut Medicaid by a similar amount without knowing it will result in families losing health care coverage,” the Kentucky Democrat said.
“You can’t cut student loans by more than $200 billion without knowing it will make it harder, if not impossible, for young people to go to college. You can’t cut nutrition assistance by more than $220 billion without knowing it will leave families without food to put on the table.”
Democrats also repeatedly questioned the White House’s economic assumptions.
The U.S. economy grew by 3.1 percent in fiscal 2018. The president’s budget anticipates growth of 3.1 percent in fiscal 2020 and average growth of roughly 3 percent over the entire decade.
Vought defended the president’s proposal as mathematically realistic and fiscally responsible.
Assuming Congress agreed to Trump’s budget cuts and the economy grows at 3.1 percent, the government would collect $3.65 trillion in revenue while spending $4.75 trillion in fiscal 2020.
With the spending reductions, the national debt, which topped $22 trillion last month, would rise by $7.26 trillion between fiscal 2020 and 2029, approaching or surpassing $30 trillion.
U.S. Rep. Steven Horsford, D-Nev., told Vought that the blueprint won’t be adopted.
“This administration’s budget is dead on arrival in the House,” he said.
In an interview, Womack said the White House always faces a fight over how to spend taxpayer money.
“I’ve seen a lot of presidents’ budgets in the eight years I’ve been here,” he said. “They are more aspirational in terms of establishing the priorities of the administration, which is understandable, but they become a really hard sell in a divided government where Democrats will have their say in the House and even in the Senate.”
It’s unclear whether Democrats will be able to agree among themselves on a budget, he said.
“There very possibly could not be a budget passed,” he added.
Congress has struggled to approve budgets in recent years, he noted.
“The whole process is flawed,” he said. “We need budget process reform, and the American people deserve it, and it’s something I’ll try to continue to champion.”
Closer scrutiny of non-defense discretionary spending is a good thing, Womack said. But cuts to those programs won’t result in a balanced budget, he said.
Discretionary spending, including military spending, accounts for only 30 percent of federal spending, Womack said. The other 70 percent is for mandatory programs such as Social Security, Medicaid and Medicare, plus interest on the debt.
By fiscal 2029, mandatory spending will make up 78 percent of the budget, he added.
“If somebody says that you can cut discretionary programs sufficient to eliminate deficits, then they’re not being intellectually honest. It’s just not possible,” he added.