President Trump on Tuesday proposed dramatic changes to the role of the federal government, issuing a budget plan that culls or eliminates numerous programs that the White House says are a waste of money or create too much dependency.
Some of these programs — including Medicaid and the modern version of food stamps — provide benefits to up to a fifth of all Americans, and the breadth of the cuts has rattled lawmakers from both parties who have warned that the reductions go too far.
For Trump, his $4.094 trillion budget proposal for the fiscal year that begins in October marks his first exercise in spelling out — in great detail — how he wants the government to change. White House Office of Management and Budget Director Mick Mulvaney called the plan a “Taxpayer First Budget,” and he said they worked to jettison any spending that they felt they could not defend. In total, this meant roughly $3.6 trillion in cuts over the next 10 years.
These cuts, White House officials said, would usher in a sustained period of strong economic growth that would increase wealth, create more jobs and reduce poverty.
“I think what Trumponomics is and what this budget is a part of is an effort to get to sustained 3 percent economic growth in this country again,” Mulvaney said in a briefing with reporters.
But getting there would require a lot of red ink.
Funding for Medicaid, the health-care program for low-income Americans and many people in nursing homes, would be cut by more than $800 billion over 10 years. Funding for the Supplemental Nutrition Assistance Program, a modern version of food stamps that provided benefits to 44 million people in 2016, would be cut 29 percent. In many cases, a higher burden of paying for anti-poverty programs would be shifted away from the federal government and onto the states.
Mulvaney said too many of these programs spend other people's money. He said the government should show “compassion” for low-income Americans but it should “also...have compassion for folks who are paying [for] it.”
Research programs and environmental protection would also be slashed. There would be a short-term bump in military spending, but even that would flatline after a few years, all in the quest to eliminate the budget deficit by 2027.
The constraints he put on his budget writers made it virtually impossible for him to achieve all of his goals, and the data released by his team include assumptions that budget experts attacked as questionable or dubious.
Trump told Mulvaney not to make any cuts to Medicare benefits or the retirement program within Social Security, two of the government’s most expensive line items. And to eliminate the deficit, which they said would reach $842 billion by 2027, they had to make major cuts.
But they also made rosy assumptions about economic growth that many economists — both conservative and liberal — said went too far. Trump has proposed cutting the corporate tax rate from 35 percent to 15 percent, but his budget assumes that corporate tax receipts will increase almost every year. The budget says the U.S. government will collect $328 billion in estate and gift taxes over the next decade, but it also says Trump will eliminate the estate tax.
White House budget proposals are often met with a skepticism on Capitol Hill, but Tuesday's release provides the Trump administration with its best opportunity yet to spell out its vision for how the government should be run.
It calls for eliminating many of the foreign aid “grants” that the United States extends to other countries and replacing them with loans. It aims to make it harder for people to qualify for Social Security Disability Insurance benefits and easier to shift people who receive those benefits back into the workforce.
It would essentially crack down on the Consumer Financial Protection Bureau, which was created after the financial crisis, and give Congress more power to limit its budget. And it would cut retirement benefits for people who worked for the federal government.
But it also proposes more spending in several areas. It would provide a temporary burst of new defense spending, which White House officials say would allow them to add 56,400 service members in 2018. It would also increase spending on immigration control and border security and provide another $200 billion for infrastructure projects over 10 years. It would allocate $1.6 billion for the creation of a wall along the U.S. border with Mexico.
“We are absolutely dead serious about the wall,” Mulvaney said Tuesday.
Democrats immediately attacked the budget plan and vowed to prevent any part of it from becoming law. Republicans hold a two-seat majority in the Senate, and it is difficult for them to advance major policy changes without support from Democrats.
“These senseless, irresponsible choices serve one purpose: to pave the way for tax cuts for the very wealthiest,” said Sen. Sheldon Whitehouse (D-R.I.). “The good news is that this extremist proposal will go nowhere in the Senate.”
President Obama's former budget director, Peter Orszag, tried to deconstruct much of Trump's first budget plan in a series of Twitter posts, decrying the size of some of the cuts and ridiculing economic assumptions about growth.
And the size of the cuts appeared to make even many Republicans uneasy. Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) disregarded the White House’s plan to cut the Children’s Health Insurance Program and instead said Democrats and Republicans would work to reauthorize it later this year.
Asked about the CHIP cuts, Rep. Mark Walker (R-N.C.) warned there was such a thing as too many cuts.
“There will be some concerns if we go too deep in some of these areas,” he said.