The Atlanta Journal-Constitution
Budget plan lifts defense spending
White House proposal cuts social programs, doesn’t eliminate deficit.
WASHINGTON — The White House released a tax and spending plan Monday that would not eliminate the federal budget deficit after 10 years, its first public acknowledgment that large spending increases and the $1.5 trillion tax cut are putting severe pressure on the government’s debt.
The proposal, titled “Efficient, Effective, Accountable: An American Budget,” sets forth President Donald Trump’s priorities as Congress prepares to consider spending bills for the next fiscal year.
It would continue to markedly increase military spending and set aside money for a wall along the U.S.-Mexico border.
The plan also calls for major cuts to Medicare, Medicaid, food
stamps and other social programs, reductions that conservatives have long sought.
But even with these reductions, which add up to more than $3 trillion in cuts over 10 years, the proposal would not bring the budget into balance because of the lost tax revenue and higher spending on other programs.
The White House projects a large gap between government spending and tax revenue over the next decade, adding at least $7 trillion to the debt over that time. In 2019 and 2020 alone, the government would add a combined $2 trillion in debt under Trump’s plan.
Even with upbeat economic forecasts and numerous proposed cuts to social programs, most of which will be dead on arrival in Congress, the Trump administration projects that it would run a deficit of $450 billion in 2027.
Last year, the White House projected its tax and spending proposals would lead to a budget surplus of $16 billion in 2027, which meant the government would have brought in more money through taxes than it spent on programs, something last accomplished in 2001.
The budget plan was met coolly by many Republicans.
“Budgets are aspirational documents and seldom have a real impact on spending,” said Rep. Mark Meadows, R-N.C., chairman of the conservative Freedom Caucus. “Certainly I applaud the president’s willingness to address our military, veterans and many suffering from the opioid abuse epidemic. I am not investing much time critiquing the budget when it has little to do with what Congress actually spends.”
Democrats, though, reacted with hostility, saying it confirmed their long-held belief that Trump would pivot from large tax cuts for corporations to a push to scale back government benefits for low-income Americans.
“The Trump budget proposal makes clear his desire to enact massive cuts to health care, anti-poverty programs, and investments in economic growth to blunt the deficit-exploding impact of his tax cuts for millionaires and corporations,” said Kentucky Rep. John Yarmuth, the top Democrat on the House Budget Committee. “These cuts to critical federal investments are so extreme they can only reflect a disdain for working families and a total lack of vision for a stronger society.”
The biggest factor in the White House’s deficit problems appears to be issues caused by the tax law.
The White House had promised that last year’s tax cut plan would pay for itself by generating so much revenue that it would not add to the deficit. This ran in sharp contrast to numerous forecasts that found that it would add $1 trillion to $2 trillion to the debt over 10 years.
Monday’s budget proposal paints a much different picture. It forecasts that tax revenue will plummet in the next few years and never recover to the levels forecast before the tax plan was enacted in December.
The White House even projects that tax receipts will be $200 billion lower in 2027 than forecast last year, even though it had promised that the plan would fully pay for itself by then.
Republicans have long called for eliminating the budget deficit, but Trump has ushered in a new economic strategy, jettisoning deficit fears in favor of a low-tax, high-spending model that he thinks will boost the economy.