Sun Sentinel Palm Beach Edition
In 1st budget, Trump relies on deep cuts
Antipoverty programs targeted in budget that relies on strong economic growth
WASHINGTON — President Donald Trump's first full budget, to be released Tuesday, relies on higher-than-projected economic growth and deep cuts in antipoverty programs such as Medicaid to pay for tax cuts and higher spending for the military, border security and infrastructure.
Mixing conservative goals to shrink government and reduce taxes with his own ideas for increased spending to spur growth will test Trump’s support among GOP lawmakers who have long advocated for controlling deficits and paring domestic programs.
Yet many Republicans have objected to the scale of some cuts that the White House has advertised in advance, in programs ranging from State Department operations abroad to to community health spending. By far Trump’s biggest reductions would come from Medicaid, despite Trump’s repeated promises as a candidate that he would not touch the health program for low-income and disabled Americans.
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. Such rates would outpace projections of the Congressional Budget Office, which predicts an average of 1.9 percent over the next decade, as well as those of the Federal Reserve and major private-sector economic forecasters.
Whether realistic or not, higher growth estimates allow the Trump administration to project the government will collect more revenues from taxpayers and spend less on safety-net 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,” Mick Mulvaney, the director of the White House budget office, said Monday.
“Assuming that 1.9 percent growth out into infinity for this country is a pessimistic view for this culture and this society and we refuse to accept that,” he said.
Trump’s budget will propose a $54 billion increase in defense spending for the fiscal year that starts Oct. 1, as well as 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 sea ports, the electrical grid and other major infrastructure over the next decade.
Trump is also proposing $25 billion over 10 years in federal subsidies for paid leave for parents with newborns, a plan pushed by Trump’s daughter Ivanka.
Next to economic growth, the main way that Trump proposes to reduce annual deficits is through squeezing antipoverty programs for some $1.7 trillion over the next decade. Nearly half, more than $800 billion, would come from Medicaid, reflecting the savings that the White House and House Republicans have anticipated in health insurance legislation unraveling the Affordable Care Act.
Other changes would tighten qualifications for nutrition assistance commonly known as food stamps, and shrink the Children’s Health Insurance Program and the Social Security Disability Insurance. Cuts also would end federal funding for school lunches and Habitat for Humanity, according to administration officials.
Trump’s proposal is “a taxpayer-first budget,” Mulvaney said, that will look to cancel or starve programs that the White House sees as ineffective.
“I can’t look taxpayers in the eye any more and say, ‘You have to keep paying for this.’ We can’t afford it and we cannot justify to the people who are paying the taxes.”
Yet many beneficiaries of the targeted programs are working-class Americans from whom Trump drew so much political support. The scale of proposed Medicaid cuts would likely lead to widespread coverage losses, according to independent experts, some state officials and advocates for children, the elderly and others who rely on the program.
Health care cuts would reduce funding in many states such as Ohio and West Virginia that voted decisively for Trump.
The budget “betrays millions of struggling Americans who voted for the President,” Robert Greenstein, head of the liberal Center on Budget and Policy Priorities, said Monday, adding that Trump’s proposals would “make inequality and poverty significantly worse, while allowing deficits, when honestly measured, to soar.”