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Trump seeks $4.7 trillion budget with domestic cuts, $8.6 billion in wall funding

President Trump's 2020 budget proposal would slash discretionary spending. Here's how it would impact federal agencies. (Video: Taylor Turner/The Washington Post)

President Trump proposed a $4.7 trillion budget plan Monday that stands as a sharp challenge to Congress and the Democrats trying to unseat him in 2020, the first act in a multi-front struggle over the role of government that threatens to consume Washington for the next 18 months.

The plan would dramatically expand spending on programs and initiatives popular with Republicans, such as $750 billion in new defense spending and $8.6 billion for barriers along the U.S.-Mexico border. At the same time, it would slash spending on Medicaid, food stamps, environmental protections and other programs that Democratic presidential candidates vowed to preserve and expand.

The budget proposal ran into an immediate buzz saw on Capitol Hill, where many Democrats flatly rejected it and even some Republicans sought to distance themselves from key details.

And the demand for $8.6 billion for a border wall, less than two months after a 35-day partial government shutdown paralyzed much of Washington, raised the possibility that there could be an even more dramatic impasse if a spending deal isn’t reached by the end of September.

Graphic: What Trump proposed in his 2020 budget

The budget plan sets up a contrast with Trump’s 2020 Democratic rivals for the White House, proposing to shrink spending on social programs at a time when many of the president’s challengers are promising to radically increase it.

Top White House officials acknowledged that lawmakers routinely dismiss these budget proposals, but they signaled a willingness on Monday to fight harder this year than they have in the past.

“We need to continue to secure the country,” said White House Office of Management and Budget acting director Russell Vought. “We need to continue to secure the border. We’re not going to be bashful about that. But at the same time, we’re also going to say that we have many, many programs that are wasteful and inefficient that we can no longer afford.”

Trump’s “Budget for a Better America” features dozens of spending cuts and policy overhauls.

Total spending on Medicare, the popular health-care program for the elderly that in the past he had largely said he would protect, would be reduced by about $845 billion over 10 years. Some of those savings — possibly between $250 billion and $300 billion, according to an estimate from the Committee for a Responsible Federal Budget’s Marc Goldwein — would be redirected to other health programs, but most would be removed from the budget.

The president’s budget also proposes a major overhaul of Medicaid, the health-care program for low-income Americans run jointly with states, by turning more power over to states and cutting spending by $241 billion over 10 years.

“The cruel and shortsighted cuts in President Trump’s budget request are a road map to a sicker, weaker America,” said House Speaker Nancy Pelosi (D-Calif.), effectively dooming the budget by promising that the House would reject it.

President Trump’s White House budget proposal for fiscal 2020

Even with the cuts in Trump’s budget, the spending plan predicts annual deficits to top $1 trillion from 2019 through 2022, a threshold that has caused consternation within GOP ranks for weeks and only came into sharp focus on Monday.

Some agencies, particularly the Environmental Protection Agency and the departments of State, Transportation, Education and Interior would see their budgets severely reduced. The Commerce Department budget would increase in preparation for the 2020 Census, but Democrats said the census money was insufficient.

Trump’s GOP allies, meanwhile, gave the budget plan a lukewarm reception.

Senate Budget Committee Chairman Mike Enzi (R-Wyo.) said the proposal was “the first step in the federal budget process and will allow us to consider how his priorities align with the priorities of Congress.”

The budget was full of provisions that Republicans have long embraced but had not been put forward on such a scale. It would impose mandatory work requirements on millions of people who receive welfare assistance, including for food and housing, while dramatically increasing the defense budget to $750 billion next year, a 5 percent increase from 2019.

Trump and other Republicans have said the federal budget is full of waste, arguing that many federal agencies could function with less taxpayer money.

Still, according to Trump’s budget, the spending cuts would do little to reduce what is shaping up to be a colossal deficit in the next several years. The deficit is the annual gap between spending and tax revenue.

The budget foresees $1.1 trillion deficits in 2019, 2020, and 2021, and a $1 trillion deficit in 2022. Asked about this, Vought said: “We do have large deficits. That’s why we are here transparently saying we have a problem as a country.”

White House officials think the budget proposal would eliminate the deficit by 2035, but Democrats faulted the plan for relying on rosy estimates of future economic growth to create large increases in future tax revenue.

Trump to demand $8.6 billion in new wall funding, setting up fresh battle with Congress

These deficits will add to the existing $22 trillion debt and have tremendous impact on government spending. For example, the White House now projects that the government will spend $482 billion on interest payments for the debt next year, more than the entire budget for Medicaid.

Republicans have long called for taking steps that shrink — or even eliminate — the deficit, and putting forward a plan that would create $4.3 trillion in new debt over four years could give Democrats a fresh target on the campaign trail.

There is a crowded field of Democrats seeking the nomination to challenge Trump in the next presidential election, and at a time when Trump is trying to pull the country to the right, the Democratic Party has moved left.

Several Democratic senators running for president have backed the Medicare-for-all legislation of Sen. Bernie Sanders (I-Vt.), which would expand federal spending on the health program by as much as $30 trillion, just as the Trump administration is looking to cut those costs.

Trump’s budget also calls for maintaining existing federal funding for child-care programs, hoping to generate additional spending at the state level. Democratic candidates have called for the federal government to increase its spending on child care, with Sen. Elizabeth Warren (D-Mass.) recently unveiling a plan that would ensure free, government-subsidized child care for every American earning less than about $50,000 annually.

The administration’s budget also revives its push for an infrastructure bill, asking for $200 billion in federal dollars over 10 years, which it says will lead to $1 trillion in federal, state and private spending on roads, housing, ports and other investments.

Some Democratic presidential hopefuls have called for programs on a much bigger scale, with candidate Sanders recently calling for the federal government to rescind the 2017 GOP tax cut, estimated to cost about $1.5 trillion, and spend $1 trillion in new federal dollars on the nation’s roads, bridges and highways, among other things.

House Budget Committee Chairman John Yarmuth (D-Ky.) said the White House spending blueprint would give presidential challengers plenty of material to show how their agenda is different.

“If I were running against him I would sure use it against him,” he said.

White House officials think Trump’s economic agenda has been successful so far, leading to job growth, higher wages and economic expansion. But critics allege he achieved this in part through huge levels of fiscal stimulus, including tax cuts and spending increases, that have widened the deficit and added several trillion dollars to the government’s debt.

Administration officials say the funding request for the border would allow them to complete 722 miles of barriers, the full amount they have identified as necessary. Building the wall would fulfill Trump’s core campaign promise, although it would have U.S. taxpayers footing the bill for something he long claimed would be paid for by Mexico.

The defense spending increase in the budget includes funneling more than $170 billion into a special overseas account, something even some Republicans dismissed as a gimmick aimed at getting around existing spending caps. However, defense hawks on Capitol Hill welcomed the Pentagon budget increase. Rep. Mac Thornberry of Texas, the top Republican on the House Armed Services Committee, warned against getting “distracted by the construction of the budget request.”

The budget does reflect the changing nature of Trump’s agenda since taking office.

He has continued to try to pump more money into the military and border security programs, and the budget provides funding for the creation of a Space Force, and a U.S. Space Command, ideas Trump has personally pushed even while running into some resistance from military leaders and congressional Republicans.

Senate Appropriations Chairman Richard C. Shelby (R-Ala.) said last week that he’s skeptical about the need to create a new branch of the military to deal with space.

And despite Trump’s decision to slash spending for most Cabinet agencies, his budget makes room for women- and family-focused priorities embraced by Ivanka Trump, his daughter and adviser. It includes a provision supporting state paid family leave programs, and allocates $100 million for her recently launched Women’s Global Development and Prosperity Initiative, an effort to help women in the workforce succeed as entrepreneurs.

While Democratic rivals for the White House next year ramp up their attacks on the president’s policy agenda, Democrats in Congress are planning to challenge Trump in the coming months on his budget plan. In addition to the Sept. 30 deadline for a spending agreement, lawmakers think they will need to reach a deal to raise the debt ceiling about that time.

The debt ceiling is a borrowing cap established by Congress, and it prohibits the Treasury Department from issuing more debt. The government is bumping up against the debt limit now, and the Treasury has begun emergency steps to buy more time so Congress can eventually vote to raise it. Several lawmakers have said they expect the debt ceiling to be raised as part of a broader budget deal this summer or fall.

But if budget talks bog down later this year amid a fight over the border wall, it could force lawmakers to rethink the timeline and their entire approach.