Trump’s record $4.7 trillion budget relies on strong growth
WASHINGTON — President Donald Trump proposed a record $4.7 trillion federal budget for 2020 on Monday, relying on optimistic 3.1 percent economic growth projections alongside accounting shuffles and steep domestic cuts to bring future spending into promised balance in 15 years.
The deficit is projected to hit $1.1 trillion in the 2020 fiscal year, the highest in a decade. The administration is counting on robust growth, including from the Republican tax cuts — which Trump wants to make permanent — to push down the red ink. Some economists, though, say the bump from the tax cuts is waning, and they project slower growth in coming years. The national debt is $22 trillion.
Even with his own projections, Trump’s budget would not come into balance for a decade and a half, rather than the traditional hope of balancing in 10.
Presidential budgets tend to be seen as aspirational blueprints, rarely becoming enacted policy, and Trump’s proposal for the new fiscal year, which begins Oct. 1, sets up a showdown with Congress over priorities, including his push for $8.6 billion to build the U.S-Mexico border wall.
Titled “A Budget for a Better America: Promises Kept. Taxpayers First,” Trump’s proposal “embodies fiscal responsibility,” said Russ Vought, the acting director of the Office of Management and Budget.
Despite the large projected deficits, Vought said the administration has “prioritized reining in reckless Washington spending” and shows “we can return to fiscal sanity.”
Perhaps most notably among spending proposals, Trump is reviving his border wall fight. Fresh off the longest government shutdown in history, his 2020 plan shows he is eager to confront Congress again over the wall.
Speaking on CNBC Monday, Vought confirmed the $8.6 billion border request. He said “the border situation is deteriorating by the day” with “record numbers of apprehensions.”
An administration official said Trump’s budget proposes increasing defense spending to $750 billion — and building the new Space Force as a military branch — while reducing nondefense accounts by 5 percent, with cuts recommended to economic safety-net programs used by many Americans. The $2.7 trillion in proposed spending cuts is higher than any administration in history, they say.
The budget includes work requirements for those receiving food stamps and other government aid as part of the $2.7 trillion in non-defense cuts over the decade.
The plan sticks to budget caps that both parties have routinely broken in recent years. To stay within the caps, the budget shifts a portion of the defense spending, some $165 billion, to an overseas contingency fund, which some fiscal hawks will view as an accounting gimmick.
Conservatives railed for years against deficits that rose during the first years of Barack Obama’s administration as tax revenue plummeted and spending increased during the Great Recession.
By refusing to raise the budget caps, Trump is signaling a fight ahead. The president has resisted big, bipartisan budget deals that break the caps — threatening to veto one last year — but Congress will need to find agreement on spending levels to avoid another federal shutdown in the fall.
The Democratic chairman of the House Budget Committee, Rep. John Yarmuth of Kentucky, called the proposed cuts to essential services “dangerous.” He said Trump added nearly $2 trillion to deficits with the GOP’s “tax cuts for the wealthy and large corporations, and now it appears his budget asks the American people to pay the price,” the Democrat said.
While pushing down spending in some areas, including the Environmental Protection Agency, the proposal will seek to increase funding in others to align with the president’s priorities, according to one official.
The administration will invest more than $80 billion for veterans services, a nearly 10 percent increase from current levels, including “significant” investments in rehabilitation, employment assistance and suicide prevention.
It will also increase resources to fight the opioid epidemic with money for prevention, treatment, research and recovery, the administration said. And it seeks to shift some federal student loan costs to colleges and universities.
The proposal will also include $1 billion for a child care fund that would seek to improve access to care for underserved populations, a White House official confirmed. The one-time allocation is championed by the president’s daughter Ivanka Trump, who has focused on economic advancement for women in her role as a White House adviser.
It also provides $200 billion toward infrastructure, much lower than the $1 trillion plan Trump once envisioned. The plan says that money would be leveraged with private dollars, but Congress has largely panned that approach.
White House economic adviser Larry Kudlow said Trump’s budget “points a steady glide path” toward lower spending and borrowing as a share of the nation’s economy. He also told “Fox News Sunday” there was no reason to “obsess” about deficits, and expressed confidence that economic growth would top 3 percent in 2019 and beyond. Others have predicted lower growth.
The border wall remains a signature issue for the president and is poised to stay at the forefront of his agenda, even though Congress has resisted giving him more money for it.
Leading Democrats immediately rejected the proposal.
“Congress refused to fund his wall and he was forced to admit defeat and reopen the government. The same thing will repeat itself if he tries this again,” said House Speaker Nancy Pelosi, D-Calif., and Senate Democratic leader Chuck Schumer of New York. They said the money “would be better spent on rebuilding America.”
In seeking $8.6 billion for more than 300 miles of new border wall, the budget request would more than double the $8.1 billion already potentially available to the president for the wall after he declared a national emergency at the border last month in order to circumvent Congress — although there’s no guarantee he’ll be able to use that money if he faces a legal challenge, as is expected. The standoff over the wall led to a 35-day partial government shutdown, the longest in U.S. history.
Along with border wall money, the proposed budget will also increase funding to increase the “manpower” of Immigration and Customs Enforcement officers and Customs and Border Patrol at a time when many Democrats are calling for cuts — or even the elimination — of those areas. The budget also proposes policy changes to end sanctuary cities, the administration said.
The budget arrives as the Senate readies to vote this week to terminate Trump’s national emergency declaration. The Democratic-led House already did so, and a handful of Republican senators, uneasy over what they see as an overreach of executive power, are expected to join Senate Democrats in following suit. Congress appears to have enough votes to reject Trump’s declaration but not enough to overturn a veto.
Trump invoked the emergency declaration after Congress approved nearly $1.4 billion for border barriers, far less than the $5.7 billion he wanted. By doing that, he can potentially tap an additional $3.6 billion from military accounts and shift it to building the wall. That’s causing discomfort on Capitol Hill, where even the president’s Republican allies are protective of their power to decide how to allocate federal dollars. Lawmakers are trying to guard money that’s already been approved for military projects in their states — for base housing or other improvements.
The wall with Mexico played a big part in Trump’s campaign for the White House, and it’s expected to again be featured in his 2020 re-election effort. He used to say Mexico would pay for it, but Mexico has refused to do so.