Skip to content

Spending cuts, growth outpace tax cuts, military increases

Copies of President Donald Trump’s budget for Fiscal Year 2020 are prepared for distribution at the Government Publishing Office in Washington. (Bill Clark/CQ Roll Call)
Copies of President Donald Trump’s budget for Fiscal Year 2020 are prepared for distribution at the Government Publishing Office in Washington. (Bill Clark/CQ Roll Call)

President Donald Trump unveiled a $4.7 trillion budget request for fiscal 2020 that would boost military funding, cut non-defense programs and intensify the partisan fight over a southern border wall.

The tax and spending blueprint calls for saving $2.8 trillion over the coming decade by cutting non-defense discretionary programs, curbing health care costs, imposing tougher work requirements on welfare programs and restructuring federal student loans, among other things.

Even so, the budget plan assumes $7.2 trillion in annual deficits over the coming decade. It would take 15 years to bring the budget into balance, a senior administration official said.

For the fiscal year that begins Oct. 1, Trump would increase defense spending by about 5 percent to $750 billion, despite a spending cap imposed by a deficit reduction law that requires cuts. To get around the cap, the budget calls for funneling $165 billion into a war-related account that is exempt from spending limits.

At the same time, Trump would cut non-defense programs by about 5 percent from current levels and cancel previously approved projects to total about $55 billion in reductions, as required under the deficit law.

Total discretionary spending, combining defense and non-defense programs, would be trimmed by 1.8 percent in the coming year, to $1.3 trillion. The rest of the budget is made up of entitlement programs like Social Security and Medicare, along with interest on the debt.

If all the administration’s recommendations were carried out, deficits would gradually decline from $1.1 trillion in fiscal 2020 to $202 billion in fiscal 2029.

But the plan also assumes a continuation of relatively robust economic growth for the coming decade with no downturns. The administration forecasts a growth rate of 3.1 percent in fiscal 2020 and staying at 3 percent through fiscal 2024. By contrast, the Congressional Budget Office forecasts a 1.7 percent growth rate, on average, from 2020 through 2023.

Trump would also renew his fight over a border wall and up the ante by requesting $8.6 billion in fiscal 2020, a 50 percent increase from the $5.7 billion he sought from Congress this year. The new larger request includes $5 billion for the Department of Homeland Security, combined with $3.6 billion from military construction accounts, a senior administration official said.

Democratic lawmakers, and even some Republicans, have already dismissed Trump’s budget as a non-starter. Democrats have insisted on rough “parity” in the treatment of defense and non-defense spending, while opposing money for a border wall.

The overall trim to discretionary spending masks large shifts in funding priorities among various agencies. While on average, non-defense accounts would be cut by 5 percent, border security and veterans programs within those totals are in line for big boosts.

The Department of Veterans Affairs would get a 7.5 percent boost, to $93.1 billion. And the Department of Homeland Security would get a 7.4 percent increase, to $51.7 billion.

Revenue would total $3.6 trillion in the coming year, while spending would total $4.7 trillion, resulting in a deficit of $1.1 trillion. The debt held by the public would grow from nearly $18.1 trillion in fiscal 2020 to $24.8 trillion in fiscal 2029.