Trump plans ‘rescis­sions’ af­ter record month

Aims to col­lect funds un­likely to be spent

The Washington Times Weekly - - Politics - BY STEPHEN DINAN

The gov­ern­ment had its best bud­get month in his­tory in April, the Con­gres­sional Bud­get Of­fice said, as a soar­ing econ­omy put more money into peo­ple’s pay­checks — and thus more to pay to Un­cle Sam.

The Trea­sury col­lected $515 bil­lion en route to a monthly sur­plus of $218 bil­lion, both of which are records. Spend­ing, mean­while, was up moder­ately.

Pres­i­dent Trump wants to do even more to limit the spend­ing side, the White House told Congress. He said he will send up a $15 bil­lion “rescis­sions” pack­age and chal­lenge law­mak­ers to cut money that has been sit­ting un­spent in ac­counts across the gov­ern­ment.

Among the 38 cuts he will pro­pose are $4.3 bil­lion in a ve­hi­cle tech­nol­ogy loan pro­gram, $800 mil­lion from an Oba­macare pay­ment pilot pro­gram and more than $200 mil­lion that the Obama ad­min­is­tra­tion ear­marked for the Ebola out­break that dis­si­pated years ago.

The ad­min­is­tra­tion said it is the largest sin­gle rescis­sion pack­age any pres­i­dent has ever sub­mit­ted and would be the first rescis­sions-only White House pro­posal to clear Congress in nearly 20 years.

“This is money that was never go­ing to be spent,” said a se­nior ad­min­is­tra­tion of­fi­cial, brief­ing re­porters ahead of the an­nounce­ment.

Congress will have to ap­prove the pack­age for the cuts to be made. By send­ing it to Capi­tol Hill, Mr. Trump is di­rectly chal­leng­ing Demo­cratic lead­ers, who fought hard to in­crease do­mes­tic spend­ing in the March gov­ern­ment fund­ing deal and who have sig­naled that they are un­likely to want to co­op­er­ate on fur­ther cuts.

Of­fi­cials said they ex­pected no ma­jor hiccups in the House, where Repub­li­can lead­ers have been sali­vat­ing for a fight over spend­ing cuts. The Se­nate could be a tougher sell, though the ad­min­is­tra­tion said some Democrats in the up­per cham­ber have been on record back­ing sim­i­lar rescis­sion cuts.

“I don’t see any rea­son why this would need to be a 50- or 51-vote thresh­old,” an of­fi­cial said.

Un­der the rules, a bill like this does not have to face a Se­nate fil­i­buster, which could help speed pas­sage.

The big­gest rescis­sion, cov­er­ing nearly half of the $15 bil­lion, will come from the Chil­dren’s Health In­surance Pro­gram, a pop­u­lar pol­icy that pays for health care for chil­dren in low-in­come fam­i­lies whose par­ents still make too much to qual­ify for Med­i­caid.

The of­fi­cial who briefed re­porters said $5 bil­lion of that money is sit­ting in an ac­count that the pres­i­dent has no author­ity to spend. The au­tho­riza­tion lapsed sev­eral years ago. An­other $2 bil­lion is a contin­gency fund.

Se­nate Mi­nor­ity Leader Charles E. Schumer, New York Demo­crat, warned Mr. Trump against try­ing to re­cap­ture that money.

“Let’s be hon­est about what this is: Pres­i­dent Trump and Repub­li­cans in Congress are look­ing to tear apart the bi­par­ti­san Chil­dren’s Health In­surance Pro­gram (CHIP), hurt­ing mid­dle-class fam­i­lies and low-in­come chil­dren, to ap­pease the most con­ser­va­tive spe­cial in­ter­ests and feel bet­ter about blow­ing up the deficit to give the wealth­i­est few and big­gest cor­po­ra­tions huge tax breaks,” he said.

Also likely to face opposition is a move to re­voke money that has been sit­ting un­spent in a Su­per­storm Sandy relief fund. New York and New Jersey law­mak­ers are ex­pected to be ter­ri­to­rial over that cash. The ad­min­is­tra­tion says the money would re­quire a lo­cal match, and no lo­cal gov­ern­ments have stepped up.

Congress can trim the amount, but it can­not go higher than Mr. Trump pro­posed.

Rescis­sion pack­ages used to be a sta­ple of Wash­ing­ton, with pres­i­dents reg­u­larly send­ing them to Capi­tol Hill for de­bate and pas­sage. But the prac­tice fell out of use dur­ing the terms of Pres­i­dents Obama and Ge­orge W. Bush.

The ad­min­is­tra­tion said it wanted to re­store the “mus­cle mem­ory” for the process and to ex­pect other bills that would go be­yond un­spent money to cut ex­ist­ing spend­ing plans.

The next one will tar­get du­plica­tive pro­grams, such as the tens of bil­lions of dol­lars iden­ti­fied by the Gov­ern­ment Ac­count­abil­ity Of­fice in a re­port last month.

Con­gres­sional Repub­li­cans have been seething over the size of gov­ern­ment spend­ing since this year’s bud­get deal and “om­nibus” spend­ing bill paved the way for $300 bil­lion in new spend­ing in 2018 and 2019. A ma­jor­ity of that money will go to the Pen­tagon, but do­mes­tic pro­grams are get­ting a ma­jor boost as well.

Repub­li­cans were far more ex­cited about the other side of the ledger, though, af­ter pass­ing a ma­jor tax cut bill in De­cem­ber. Most an­a­lysts said the tax cuts would starve the gov­ern­ment of rev­enue, but Repub­li­cans in­sist a roar­ing econ­omy will pay for much of the tax cuts.

The April CBO num­bers don’t re­flect most of the tax cuts, which didn’t be­gin to roll through the econ­omy un­til the past cou­ple of months.

CBO an­a­lysts were sur­prised by the April sur­plus, which was some $40 bil­lion more than they pre­dicted less than a month ago.

They said they will have a bet­ter idea of what is be­hind the surge as more in­for­ma­tion rolls in, but for now said it looks like in­di­vid­ual tax­pay­ers are send­ing more money be­cause they have higher in­comes.

“Those pay­ments were mostly re­lated to eco­nomic ac­tiv­ity in 2017 and may re­flect stronger-than-ex­pected in­come growth in that year,” the an­a­lysts said in their monthly bud­get re­view. “Part of the strength in re­ceipts also may re­flect larger-than-an­tic­i­pated pay­ments for eco­nomic ac­tiv­ity in 2018. The rea­sons for the added rev­enues will be bet­ter un­der­stood as more de­tailed in­for­ma­tion be­comes avail­able later this year.”

Of­fi­cial num­bers are due out from the Trea­sury De­part­ment in a few days, but the CBO is usu­ally ac­cu­rate to within a cou­ple of bil­lion dol­lars.

April is al­ways a strong month for gov­ern­ment fi­nances, with tax­pay­ers fil­ing their re­turns for the pre­vi­ous year and set­tling up what they owe, even as ex­pen­di­tures often dip for the month.

But this year was par­tic­u­larly strong, with re­ceipts jump­ing 13 per­cent com­pared with a year ago.

Seven months into fis­cal year 2018, the gov­ern­ment is run­ning a $382 bil­lion deficit. That is $37 bil­lion worse than last year’s fig­ure through seven months, chiefly be­cause spend­ing has surged 5 per­cent so far this year.

Higher in­fla­tion is driv­ing up the gov­ern­ment’s debt pay­ments, while Home­land Se­cu­rity dis­as­ter relief, So­cial Se­cu­rity ben­e­fit pay­ments and the De­fense De­part­ment also re­ported sig­nif­i­cant in­creases.

AS­SO­CI­ATED PRESS PHO­TO­GRAPHS

Pres­i­dent Trump, who wants to do more to limit spend­ing, plans to send Congress a $15 bil­lion “rescis­sions” pack­age.

Se­nate Mi­nor­ity Leader Charles E. Schumer has warned Mr. Trump against try­ing to re­cap­ture that money.

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