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