White House plan stretches deficit D-day
10-year gap-elimination deadline reset to 15 years
WASHINGTON — The White House is preparing to propose a $4.8 trillion budget that would fail to eliminate the federal deficit over the next 10 years, according to an internal summary of the plan obtained by The Washington Post, missing a longtime GOP fiscal target.
Instead, White House officials plan to say their budget proposal would close the deficit by 2035. During Trump’s first year in office, his advisers said their budget plan would eliminate the deficit by about 2028. This new budget will mark the third consecutive time that they abandon that 10-year goal and instead suggest a 15-year target. This new trend shows how little progress the White House is making in dealing with ballooning government debt, something party leaders had made a top goal during President Barack Obama’s administration.
Trump has shown little interest in dealing with the deficit and debt, though some GOP party leaders say it remains a priority.
The last budget of Trump’s first term, expected to be publicly released today, also calls for about $2 trillion in cuts to “non-defense discretionary programs,” a category of government spending that does not include Social Security or Medicare.
It would also propose extending tax cuts for families and individuals that are set to expire at the end of 2025. Budget experts have projected that extending those tax cuts would reduce revenue by roughly $1 trillion.
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.
The White House promised to close the federal deficit over a similar amount of time in its budget last year, after abandoning its initial pledge to close the budget deficit in 10 years. As a presidential candidate, Trump vowed to eliminate not just the annual federal deficit but all debt held by the U.S. after eight years in office.
“Trying to balance the budget in 10 years is very difficult, so having a longer time horizon makes a lot of sense,” said Marc Goldwein, a budget expert at the Committee for a Responsible Federal Budget, which advocates reducing the deficit. “Fifteen years is still very aggressive.”
The deficit is the gap between spending and revenue, and this year it is projected to breach $1 trillion for the first time since 2012. White House officials are expected to try to emphasize today that their $4.8 trillion budget proposal would make progress toward reducing the deficit by 2030 but not eliminate the gap.
During the last year Obama was in office, the deficit was less than $600 billion, but it has grown significantly since then.
The 2017 tax cuts and new domestic spending approved by bipartisan majorities in Congress have widened this gap markedly. However, the new budget summary contains the line: “All administration policies will pay for themselves, including extending tax cut provisions expiring in 2025.”
The budget’s most significant policy prescriptions — an immediate 5% cut to nondefense agency budgets passed by Congress and $700 billion in cuts to Medicaid over a decade — are nonstarters on Capitol Hill. But the Trump budget is a blueprint written as if Trump could enact it without congressional approval. It relies on rosy economic projections and claims of future cuts to domestic programs to show that it is possible to bend the deficit curve in the right direction.
The budget would reduce the deficit to $261 billion within a decade if enacted in its entirety and promises balance after 15 years. Trump’s budget blueprint also assumes 2.8% economic growth this year and growth averaging 3% over the long term.
Trump’s reelection campaign, meanwhile, is focused on the economy and the historically low jobless rate while ignoring the government’s budget.
The largest parts of the government’s budget are “mandatory” spending programs that are automatically renewed each year without congressional approval, such as Medicare, Medicaid and Social Security. Trump tweeted Saturday that the budget “will not be touching your Social Security or Medicare.” In 2015, he promised not to seek cuts to Medicaid as well, but his budgets have routinely sought big Medicaid changes that would cut roughly $800 billion from the program over 10 years.
Those proposals have not gained traction in Congress, however, and Trump has not fought for Congress to consider the changes as much as he’s battled over some of his other priorities.
Trump and key administration figures such as Treasury Secretary Steven Mnuchin had promised that Trump’s signature cuts to corporate and individual tax rates would pay for themselves; instead the deficit spiked by more than $300 billion over 2017 to 2019, falling just short of $1 trillion.
Trump has also signed two broader budget deals worked out by Democrats and Republicans to get rid of spending cuts left over from a failed 2011 budget accord. The result has been large spending levels for defense — to about $750 billion this year — and comparable gains for domestic programs favored by Democrats.
The budget is expected to request $2 billion in homeland security spending for the U.S.-Mexico border wall — billions less than in past years and billions less than Congress has agreed to. However the administration has siphoned billions more from the Pentagon budget ever since declaring a national emergency at the Mexico border after last winter’s government shutdown. The budget document says that the administration expects to have completed 400 miles of new border wall by the end of 2020.
“The president’s budget [is] to fund the wall and border security with big increases for infrastructure, technology, and law enforcement personnel,” a senior administration official said, speaking on condition of anonymity because the budget was not yet released. “This request is based on what’s required to gain operational control of the border.”
The budget is expected to propose 5% net cuts in domestic discretionary spending that is expected to include cutting the budget of the Centers for Disease Control and Prevention despite the spreading coronavirus.
In the past, Congress has restored proposed cuts to the CDC budget. At the same time, the budget would maintain Pentagon spending at about its current level, or boost it if increases in a socalled overseas contingency account are included. As in past budgets, this one would cut heavily into programs targeting low-income communities, including slashing community development block grants and home heating assistance.
The Education Department would be cut by $6 billion as the administration proposes a consolidation of elementary and secondary education, a person briefed on the proposal said.
The Trump budget also promises a $3 billion increase — to $25 billion — for NASA in hopes of returning astronauts to the moon and on to Mars. It contains a beefedup, 10-year, $1 trillion infrastructure proposal, a modest parental leave plan, and a 10-year, $130 billion set-aside for tackling the high cost of prescription drugs this year.
The proposed budgets for nondefense domestic agencies, for programs that deal with housing, environmental protection, and agriculture, would fall well below spending caps lawmakers and the administration already agreed to in a bipartisan budget deal for 2021. That all but ensures that the budget will face bipartisan opposition on Capitol Hill.
The federal debt has already grown by about $3 trillion under Trump.
Still, the president’s plan does anticipate significant savings through a series of cuts and changes to programs designed to assist the nation’s most vulnerable citizens.
Those include $135 billion in a drug pricing overhaul, $292 billion from adding a work requirement to welfare programs, $170 billion from changing student loan laws, $70 billion from overhauling disability programs, and $266 billion 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.
“This destructive and irrational president is giving us a destructive and irrational budget,” said House Budget Committee Chairman John Yarmuth, D-Ky. “The budget reportedly includes destructive changes to Medicaid, SNAP, Social Security, and other assistance programs that help Americans make ends meet — all while extending his tax cuts for millionaires and wealthy corporations.”
Information for this article was contributed by Jeff Stein and Erica Werner of The Washington Post; by Andrew Taylor of The Associated Press; and by Justin Sink and Erik Wasson of Bloomberg News.