Here are the top 10 things to know about President Donald Trump’s $4.7 trillion budget request for the coming fiscal year:
1. Military spending would go up. A deficit reduction law calls for a cut of 11 percent, or $71 billion, to regular national security spending, which doesn’t include war-related costs. But the Trump administration would skirt that law by pumping $165 billion into a war-related account that is exempt from spending limits, even though the money isn’t needed for overseas conflicts. The result would be a 5 percent increase to defense, which would total $750 billion in fiscal 2020.
2. Nondefense spending would go down. The White House abides by the deficit law for nondefense discretionary programs, which would be cut by about 9 percent to meet a spending cap of $543 billion. Nondefense spending would actually reach $567 billion, after incorporating funding for disaster relief, wildfire suppression and programmatic efficiencies that are exempt from spending limits. That’s still a net 5 percent cut from this year’s level — but the true “apples to apples” comparison is still around 9 percent reductions because similar “cap adjustments” were enacted for this fiscal year.
3. Trump would up the ante on a border wall. After requesting $5.7 billion last year for barriers on the southern border, which Congress mostly rejected, the president is asking for $8.6 billion in fiscal 2020. That includes $5 billion for the Department of Homeland Security, which controls the project, and $3.6 billion from military construction accounts. With Democrats staunchly opposed to a wall, the request could set the stage for another government shutdown this fall.
Watch: Why presidential budget requests are usually dead on arrival, explained
4. The budget doesn’t balance. Trump’s long-term tax and spending blueprint calls for running deficits for as long as he remains in office. Deficits would decline gradually over the coming decade, from $1.1 trillion in fiscal 2020 to $202 billion in fiscal 2029. But it would take 15 years before deficits are eliminated, according to a senior administration official.
5. The White House assumes a strong economy. Trump’s plan forecasts a much rosier economy than most other government prognosticators do. It projects a 3.2 percent growth rate this year, compared to a 2.3 percent forecast by the Congressional Budget Office and the Federal Reserve. While the White House assumes growth to stay at about 3 percent through 2024, the CBO projects a rate of only 1.7 percent on average through 2023. The faster growth Trump assumes translates into an additional $2.8 trillion in revenue over the coming decade, compared to the CBO’s forecast.
6. Trump would make steeper cuts in later years. The 10-year plan calls for $2.8 trillion in savings from planned spending. That includes a $1.1 trillion cut to nondefense discretionary programs. Changes in health care programs, including efforts to curb “wasteful spending, fraud and abuse,” would save another $1.2 trillion. Curbs on welfare programs, including tougher work requirements on recipients, would save $327 billion. And the restructuring of federal student loans would save $207 billion.
7. The budget offers a few nods to bipartisanship. The plan includes about $200 billion over 10 years for infrastructure spending, which the White House says could leverage $1 trillion from private and local sources. It also includes a one-time $1 billion “competitive fund” to help working families afford child care. It also calls for $500 million over a decade for childhood cancer research.
8. Revenue would rise. The White House would double down on the 2017 tax cuts by making temporary rate reductions permanent. With robust economic growth, it forecasts revenue to rise from $3.6 trillion in fiscal 2020 to $6.3 trillion in fiscal 2029. But spending would continue to exceed revenue, leading to more deficits.
9. The debt would get bigger. Debt held by the public would increase by about 47 percent over the decade, from $16.9 trillion this fiscal year to $24.8 trillion in fiscal 2029. As a percentage of the economy, it would peak at 82.1 percent in fiscal 2022 before gradually falling to 71.3 percent in fiscal 2029 — still well above the post-World War II historical average of 42 percent.
[Budget plan tries to create new fees, revive rejected ones]
10. The budget request is going nowhere. Democrats panned Trump’s plan, while Republican appropriators declined to endorse it, saying they need to review it. There is no way to advance spending bills without bipartisan cooperation, and congressional leaders have acknowledged the need to raise spending limits to get any agreement.
CQ subscribers can get comprehensive coverage of Trump’s budget, including how it affects every major federal agency, here.
The bottom line: Presidential budgets are called aspirational for good reason.