Trump Administration Releases Budget Proposal with $3.6 Trillion in Cuts

On Tuesday, President Trump released his 62-page budget proposal. The document, titled “A new Foundation for American Greatness,” projects that debt would be cut to $18.6 trillion over the decade — largely based on assuming 3% economic growth — but also on $3.6 trillion in cuts to the federal government over the next decade.

Of those cuts, $1.5 trillion would come from non-defense discretionary programs, while $1.4 trillion would come from cuts to Medicaid and other health-related programs. There is no funding for Planned Parenthood included.

For fiscal year 2018, Trump has requested $4.094 trillion, including a $54 billion increase in Pentagon and national security spending for the next fiscal year. That spike does not set a trend for the subsequent nine years, although further increases could occur as the Pentagon determines specific funding priorities moving forward.

Mick Mulvaney, director of the Office of Management and Budget (OMB), said that the $1.5 trillion in cuts to non-defense discretionary spending would be a result of their “2-Penny Plan,” which would cut non-defense discretionary spending by 2% every year.

That is, all spending that Congress votes to approve on a yearly basis (except funding for the military) would be cut by 2%, every year, for the next ten years. Overall, the budget would leave the proportion of defense to non-defense discretionary spending higher than its been in 40 years.

In 2018, non-defense discretionary would be cut by $54 billion. Programs expected to face drastic cuts include the State Department, the EPA, and the Department of Agriculture. The budget does not specifically state where these savings would come from. Instead, Mulvaney implied that savings would arise from tightening program eligibility, adding work requirements, and shifting funding responsibilities to the states.

Cuts to Medicaid, which total $839 billion, reflect the proposal’s assumption that the American Health Care Act, which narrowly passed the House earlier this month, will eventually become law.

A significant amount of those cuts,  $192 billion over the 10 year window, would come from  the Supplemental Nutrition Assistance Program (SNAP). SNAP had 44 million beneficiaries in 2016. This proposal would include language requiring States to pick up a portion of the program’s costs.

Mulvaney said that the budget, “is focused on protecting taxpayer money and cutting spending on programs that are ineffective or encourage people not to work.” These reforms could further shrink a program whose enrollment has fallen in recent years.

The proposal projects balance despite not touching Social Security or Medicare spending. Mulvaney reiterated President Trump’s campaign promise in the administration’s “skinny budget” reveal back in March, but said he was “surprised” they could find a way to balance without entitlement reform.

Meanwhile, $19 billion would be included for a new program championed by Ivanka Trump, which would provide 6 weeks of paid leave for new parents, and another $2.6 billion has been reserved for border security improvements, and $1.6 billion to begin work on a wall along the Mexican border.

On face value, this budget seems like mostly good news, but fiscal conservatives are right to be skeptical about some of its projections. The proposal relies on some questionable assumptions and does not include the full range of fiscal reform needed to truly reach a sustainable future. Overall, we should be encouraged to see a wide range of cuts — but push for the many promised cuts to become reality as legislators move forward.