WH unveils $4.4 tln ’19 budget proposal

$1 tln-plus deficits back

WASHINGTON, Feb 12, (Agencies): President Donald Trump released his second budget on Monday, seeking to bolster military spending and requesting funds for infrastructure, construction of a wall along the border with Mexico and opioid treatment programs.

The $4.4 trillion budget plan, which is viewed by Congress as little more than a suggestion, will likely draw criticism from conservatives who worry that Republicans are embracing deficit spending.

The proposal for fiscal year 2019 includes $200 billion for infrastructure spending and more than $23 billion for border security and immigration enforcement. It also provides for $716 billion in spending on military programs and for maintaining the US nuclear arsenal.

In a bid to show conservatives that the administration is embracing some fiscal discipline, the plan recommends cuts in nonmilitary spending that would lower the federal budget deficit by $3 trillion over 10 years. Presidential budgets are often ignored by the US Congress, which controls federal purse strings.

Trump’s budget request goes to Congress only days after Trump signed off on a bipartisan spending agreement by lawmakers that will increase domestic spending by $300 billion over two years — including $165 billion in new defense spending and $131 billion in non-military domestic spending.

Trump

Economy

Trump’s budget also includes a number of economic forecasts and is expected to rely on estimates that the economy will keep growing at a rapid pace for the foreseeable future, which is critical to help cover the cost of the $1.5 trillion tax-reform bill passed by Congress in December.

The budget proposal includes two key elements: $18 billion over two years for Trump’s long-promised border wall and $200 billion in federal funds to spur $1.5 trillion infrastructure investments over the next 10 years with state, local and private partners.

The budget also seeks some $13 billion in new funding over the next two years to combat the opioid epidemic.

In related news, President Donald Trump unveiled a $4.4 trillion budget for next year that heralds an era of $1 trillion-plus federal deficits and — unlike the plan he released last year — never comes close to promising a balanced ledger even after 10 years.

The growing deficits reflect, in part, the impact of last year’s tax overhaul, which is projected to cause federal tax revenue to plummet. And Monday’s budget submission does not yet reflect last week’s two-year bipartisan $300 billion pact that wholly rejects Trump’s plans to slash domestic agencies.

Tax revenue would plummet by $3.7 trillion over the 2018-27 decade, the budget projects.

The spending spree, along with last year’s tax cuts, has the deficit moving sharply higher with Republicans in control of Washington. Trump’s plan sees a 2019 deficit of $984 billion, though $1.2 trillion is more plausible after last week’s budget pact and $90 billion worth of disaster aid is tacked on. That’s more than double the 2019 deficit the administration promised last year.

All told, the new budget sees accumulating deficits of $7.2 trillion over the coming decade; Trump’s plan last year projected a 10-year shortfall of $3.2 trillion.

Funded

The 2019 budget was originally designed to double down on last year’s proposals to slash foreign aid, the Environmental Protection Agency, home heating assistance and other nondefense programs funded by Congress each year.

“A lot of presidents’ budgets are ignored. But I would expect this one to be completely irrelevant and totally ignored,” said Jason Furman, a top economic adviser to President Barack Obama. “In fact, Congress passed a law last week that basically undid the budget before it was even submitted.”

In a preview of Monday’s release, the White House on Sunday focused on Trump’s $1.5 trillion plan for the nation’s crumbling infrastructure. He also is asking for a $13 billion increase over two years for opioid prevention, treatment and long-term recovery. A request for $23 billion for border security, including $18 billion for a wall along the US-Mexico border and money for more detention beds for detained immigrants, is part of the budget, too.

Trump would again spare Social Security retirement benefits and Medicare as he promised during the 2016 campaign. And while his plan would reprise last year’s attempt to scuttle the “Obamacare” health law and sharply cut back the Medicaid program for the elderly, poor and disabled, Trump’s allies on Capitol Hill have signaled there’s no interest in tackling hotbutton health issues during an election year.

The budget also endorses a plan by Sens. Lindsey Graham, R-S.C., and Bill Cassidy, R-La., to replace the Obama-era health law with $1.6 trillion in subsidies to states over the coming decade.

The plan also reprises proposals from last year’s Trump budget to curb crop insurance costs, cut student loan subsidies, reduce pension benefits for federal workers and cut food stamps, among other proposals.

Mick Mulvaney, the former tea party congressman who runs the White House budget office, said Sunday that Trump’s new budget, if implemented, would tame the deficit over time.

“The budget does bend the trajectory down, it does move us back towards balance. It does get us away from trillion-dollar deficits,” Mulvaney said on “Fox News Sunday.”

“Just because this deal was signed does not mean the future is written in stone. We do have a chance still to change the trajectory. And that is what the budget will show tomorrow,” he said.