President Trump’s
Antipoverty programs targeted in budget that relies on strong economic growth
first budget calls for deep cuts in Medicaid, deep tax cuts and predicts higher-than-expected growth to avoid deficits.
WASHINGTON — President Trump in his first full budget says he will produce a surplus in a decade, though his fiscal pathway relies on projections of growth more optimistic than other government and private-sector economists expect and deep cuts in anti-poverty programs such as Medicaid.
The $4.1 trillion budget to be released Tuesday will show that the annual federal deficit, which was $585 billion in the fiscal year that ended Sept. 30, will steadily decline until fiscal year 2027, when the nation will have a $16 billion surplus — the first since the start of the George W. Bush administration, though small in the context of what by then would be a nearly $6 trillion budget.
Nonpartisan budget watchers and even many Republicans are sure to be skeptical. Trump promises to reach balance and even produce a small surplus while he is calling for the deepest tax cuts in history, hefty increases in military and homeland security spending, and no reductions in Medicare and Social Security, the entitlement programs that are a main driver of projected federal debt because of the aging population.
According to budget documents made available to the Washington Bureau, Trump would balance the budget in two ways. He projects economic growth averaging 3 percent starting in 2019. That’s at least a full percentage point more than government and private forecasters.
And he would slash all domestic spending by roughly a third, including a $1.7-trillion reduction in projected spending for antipoverty programs. That includes $616 billion from Medicaid, an entitlement program that he vowed as a candidate not to touch, and the Children’s Health Insurance Program.
Though House Republicans similarly have called for deep Medicaid reductions, many in the party, including governors, are opposed to significantly cutting the program designed to help low-income Americans and the disabled.
Some Republicans already have objected to the scale of other cuts that the White House has advertised in advance, in programs as diverse as State Department operations abroad and community health spending.
Republican resistance especially in the Senate, together with united opposition from Democrats, means the Trump budget is unlikely to get through Congress intact.
Other reductions include $142 billion over a decade from federal college loan programs and $72 billion from disability assistance.
The administration is banking that the nation will get back to average annual economic growth rates of 3 percent each year, a level that hasn’t been hit in years. The Congressional Budget Office predicts an average of 1.9 percent over the next decade.
Whether realistic or not, higher growth estimates allow the Trump administration to project that the government will collect more revenue from taxpayers and spend less on safetynet programs, offsetting the costs of the president’s wish list to hold deficits down. “We will get back to 3 percent growth. Everything is keyed towards it,” said Mick Mulvaney, the director of Trump’s budget office.
Trump’s budget will propose a nearly $500 billion increase in defense spending over 10 years, while cutting domestic spending by more than $2 trillion. Besides increasing military spending, Trump seeks an additional $200 billion in infrastructure spending over the next several years. Mulvaney described the public works increase as seed money to coax businesses to invest an additional $800 billion in upgrading seaports, the electrical grid and other major infrastructure over the next decade.
Trump is also proposing $19 billion over 10 years in federal subsidies for paid leave for parents with newborns, a plan pushed by Trump’s daughter Ivanka.
Other changes would tighten qualifications for food stamps, and shrink the Children’s Health Insurance Program and Social Security Disability Insurance. Cuts also would end federal funding for school lunches and Habitat for Humanity, according to administration officials.
The budget “betrays millions of struggling Americans who voted for the president,” said Robert Greenstein, head of the liberal Center on Budget and Policy Priorities.