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Top 10 things to know about Trump’s budget proposal

Proposed budget cuts are easy to pillory in 30-second campaign ads

President Donald Trump’s budget for Fiscal Year 2021 .... (Caroline Brehman/CQ Roll Call)
President Donald Trump’s budget for Fiscal Year 2021 .... (Caroline Brehman/CQ Roll Call) (CQ Roll Call)

Despite his own reelection battle in November, President Donald Trump isn’t holding back when it comes to proposing budget cuts that are easy to pillory in 30-second campaign ads, especially when juxtaposed against a bid to renew his 2017 tax cuts, much of which helped the wealthiest Americans.

Even some conservative Republicans aren’t especially happy that for all the pain that would hit domestic services and safety-net programs, the budget wouldn’t balance for 15 years while U.S. debt would continue its sharp rise.

Here are the top ten things to know about Trump’s $4.8 trillion budget request for the coming fiscal year:

  1. Nondefense spending would go down. Picking a fight with Democrats, Trump wants to stray from last summer’s bipartisan budget deal, which called for a modest increase in nondefense discretionary spending of $2.5 billion, or about 0.4 percent, above fiscal 2020 enacted spending. Instead, Trump would cut that spending by about 6 percent, or $40 billion, from this year’s level. Nondefense discretionary spending would total $590 billion, not counting funds set aside for disaster relief and fighting wildfires.
  2. Military spending would still go up. Trump would abide by last year’s agreement to raise defense spending. Total defense spending, which includes a separate account for overseas operations, would rise modestly from $738 billion in fiscal 2020 to $740.5 billion next year, an 0.3 percent increase. Democrats have said that any increase in defense should be matched with a roughly equivalent increase in nondefense spending.
  3. The border wall funding battle will resume. But this year’s version may not be quite as fierce. Trump has proposed another $2 billion for a wall along the U.S. southern border. That is far less than the $8.6 billion he requested a year ago through a combination of the Department of Homeland Security and military construction accounts. But since he declared a national emergency last year, Trump is also relying on his ability to transfer money to a border wall from other programs. Even getting $2 billion approved will be a battle, though. Congress approved only $1.375 billion for the current fiscal year.
  4. The budget doesn’t balance. The government would run a deficit of $966 billion in fiscal 2021, down slightly from the $1 trillion it projects for the current fiscal year. And Trump offers no path to a balanced budget through 2030 even if he wins a second term, though annual deficits would steadily decline over the coming decade. By 2030, the deficit would be down to $261 billion, if all White House policy changes were enacted.
  5. The White House assumes a strong economy. The hope of declining deficits is based partly on the assumption that the economy remains strong throughout the coming decade. The budget makes no allowance for an economic downturn. Instead, it projects an average growth rate of 3 percent per year. The administration fell short of that projection in 2019, when growth was 2.3 percent. And its forecast is far more optimistic than the Congressional Budget Office’s projection of 1.7 percent growth on average through the decade.
  6. The partisan battle over health care will intensify. Trump has proposed cutting Medicare spending by some $450 billion over 10 years, according to the Department of Health and Human Services, hitting service providers like hospitals and hospices, as well as cutting payments for durable medical equipment, such as oxygen tanks. Medicaid would be cut by $920 billion over a decade, including a proposed transformation of the program from an open-ended entitlement to a system of capped payments to the states and a placeholder for an unspecified “health reform vision allowance,” likely targeting the 2010 health care law’s Medicaid expansion. 
  7. The budget makes a few nods to bipartisanship. It assumes $135 billion in savings over 10 years by pushing for a yet-to-be-defined initiative that would lower the cost of prescription drugs: a priority of both parties. And it pledges a $1 trillion commitment to a major infrastructure spending program, but it’s still not clear how that initiative would be funded. The budget assumes a 10-year, $810 billion reauthorization of the Highway Trust Fund, which currently faces a revenue shortfall by relying mostly on the federal gasoline tax.
  8. New tax cuts are on hold. The budget includes no new major tax cut proposals. White House officials for months have teased the possibility of new tax cuts as Trump prepares to run for reelection, but they have also said any new plan might not come until later in the year. Even so, the budget assumes that tax cuts enacted in 2017 that are set to expire after 2025 would be extended, at a cost of $1.4 trillion over the coming decade.
  9. The debt would get bigger. Trump, who once promised as a candidate to pay off the national debt in eight years, allows for the debt to keep growing under his budget plan. Debt held by the public would grow from nearly $17.9 trillion this fiscal year to nearly $23.9 trillion in 2030, even if all his cost-cutting proposals and economic assumptions come to fruition. As a share of the economy, however, the debt would become more manageable, gradually declining from 80.5 percent of the gross domestic product this fiscal year to 66.1 percent in 2030.
  10. The budget request is going nowhere. Democrats were quick to attack Trump’s budget as “destructive and irrational,” as House Budget Chairman John Yarmuth put it in a statement Monday. The Kentucky Democrat said he has no plans to draft a budget resolution, which is ordinarily the first step toward translating the president’s budget proposals into reality. And as lawmakers prepare to seek reelection this fall, there is little prospect of getting spending bills passed before the new fiscal year begins on Oct. 1. The result most likely is a continuing resolution to extend current funding levels, as Congress punts on major fiscal decisions until after the November elections.  

Paul M. Krawzak contributed to this report.

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[White House budget would slash domestic programs, foreign aid]

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