$4.8tn US bud­get to in­crease debt, cut safety net

Muscat Daily - - BUSINESS -

Wash­ing­ton, US - Pres­i­dent Don­ald Trump’s US$4.8tn bud­get for the up­com­ing fis­cal year pro­poses bil­lions more in fund­ing for de­fence and a US mis­sion to Mars, but would bring steep cuts to so­cial pro­grammes de­spite al­most US$1tn in deficit spend­ing.

The pro­posal, which was sched­uled to be un­veiled on Mon­day, is an elec­tion-year em­bod­i­ment of many of the pol­icy pri­or­i­ties Trump has cham­pi­oned over his first three years in of­fice. He pro­poses con­tin­u­ing his ef­fort to ‘re­build’ the US mil­i­tary by in­vest­ing heav­ily in de­fence spend­ing - US$740.5bn in the next fis­cal year - in­clud­ing the cre­ation of Space Force.

But the pres­i­dent also calls for deep cuts to govern­ment pro­grams he be­lieves are un­pop­u­lar with his base, slash­ing dis­cre­tionary spend­ing by five per cent - down to US$590bn - in the com­ing year. That in­cludes ma­jor re­duc­tions in for­eign aid and en­vi­ron­men­tal pro­tec­tion pro­grams, along with strin­gent new work re­quire­ments on wel­fare pro­grammes such as food stamps and hous­ing as­sis­tance.

The an­nual bud­get pro­duced by the White House re­flects the pol­icy as­pi­ra­tions of the in­cum­bent ad­min­is­tra­tion but has no bind­ing power, since fed­eral spend­ing is ap­pro­pri­ated by Con­gress. Law­mak­ers aren’t ex­pected to fin­ish work on 2021 spend­ing lev­els un­til af­ter the Novem­ber elec­tion. And the White House move to change two-year bud­get cap lev­els ne­go­ti­ated with Democrats last sum­mer could make an even­tual spend­ing deal more dif­fi­cult.

Democrats quickly took aim at Trump’s pro­posed cuts. ‘The bud­get is a state­ment of val­ues and once again the Pres­i­dent is show­ing just how lit­tle he val­ues the good health, fi­nan­cial se­cu­rity and well-be­ing of hard-work­ing Amer­i­can fam­i­lies,’ House Speaker Nancy Pelosi said in a state­ment on Mon­day.

Trump’s bud­get shows the pres­i­dent drift­ing fur­ther away from his cam­paign pledge to elim­i­nate the US na­tional debt by the time he leaves of­fice.

US debt has al­ready risen US$3tn dur­ing Trump’s first three years in of­fice, and his plan calls for adding to the debt un­til 2035.

The US deficit would de­cline to US$966bn next year, ac­cord­ing to a se­nior ad­min­is­tra­tive of­fi­cial, who dis­cussed the con­tents of the pro­posal on con­di­tion of anonymity.

That’s be­low the US$1tn pro­jected by the non­par­ti­san Con­gres­sional Bud­get Of­fice un­der cur­rent poli­cies. To­tal debt held by the pub­lic is ap­proach­ing US$18tn and the CBO es­ti­mates it would reach US$31tn by 2031 un­der cur­rent law.

Trump has shown lit­tle of the tra­di­tional GOP con­cern about deficit spend­ing. He dis­missed con­cerns voiced by some fis­cal con­ser­va­tives at a fundraiser in Jan­uary in Florida.

“Who the hell cares about the bud­get?” Trump said in a record­ing of the closed-door re­marks ob­tained by the Wash­ing­ton Post. “We’re go­ing to have a coun­try.”

Still, the Pres­i­dent’s plan does an­tic­i­pate sig­nif­i­cant sav­ings through a se­ries of cuts and changes to pro­grammes de­signed to as­sist the na­tion’s most vul­ner­a­ble cit­i­zens.

Those in­clude US$135bn in drug pric­ing re­form, US$292bn from adding a work re­quire­ment to wel­fare pro­grammes, US$170bn from chang­ing stu­dent loan laws, US$70bn from re­form­ing dis­abil­ity pro­grammes, and US$266bn from ‘site neu­tral­ity’ rules that would see the govern­ment pay the same amount for med­i­cal ser­vices whether they were per­formed in a hos­pi­tal or at a doc­tor’s of­fice.

Pres­i­dent Don­ald Trump speaks dur­ing the Gov­er­nors’ Ball in the East Room of the White House, on Sun­day

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