The Trump administration is delivering its first budget tomorrow. That raises at least two questions.
First, we need to cut through the partisan noise and figure out what all these numbers are telling us about the administration’s priorities. Are the fiscal plans intended to make America great again or just to give rich Americans a big tax cut again? What do they cut and what do they leave alone? Are the assumptions about future growth plausible?
I’ll get to all that, but as portentous as these priorities are, the second challenge is more important: What does this budget, which almost certainly won’t be enacted (one top Republican appropriator called the budget purely symbolic, “aspirational … messaging points”), actually mean to the 320 million Americans (et al.) trying to get on with their lives?
On the first point, recognize that Trump’s first budget does not imply a fresh start. To the contrary, it will fit within the context of the administration’s endorsement of a health-care plan that essentially transfers resources that support affordable coverage for the poor, middle-class, and elderly to the wealthy. It must accommodate a tax cut that delivers trillions more to those at the top of the scale. It will build on earlier fiscal announcements that proposed cuts of more than $50 billion next year to education, infrastructure, veterans’ health, job training, R&D, and more, to plus-up defense by that same amount.
On top of those skewed priorities, news media accounts suggest that the administration will propose $800 billion in cuts (over 10 years) to food stamps, Social Security Disability coverage, and Medicaid (the latter on top of the cuts in the House Obamacare replacement bill).
So, with two partial exceptions, the President’s budget cannot be viewed as anything other than the standard issue, highly partisan, thoroughly uncompromising budgets we’ve seen from Republicans since the rise of Paul D. Ryan. The purpose of these budgets, which even Ryan himself has characterized as more “visionary” than realistic, is to shrink government outside of defense and give the savings to their wealthy donors in the form of regressive tax cuts. Their ultimate targets are Social Security, Medicare, and Medicaid, and with this budget, we can see that strategy evolving.
If you want to call that visionary, I can’t stop you. I call it greedy.
The two exceptions are child care and infrastructure proposals. In each case, the expected proposals are inadequately structured to meet real needs, but I appreciate that they’re in there. And I suspect both will be quickly cast aside by Republicans.
But does any of this matter? Why pay attention to symbolic messaging points in an era when Congress has been unable to pass almost any budget legislation outside of last-minute patches that (usually) forestall a shutdown but could never be mistaken for forward-looking vision?
Sorry, but attention must be paid, for at least two reasons.
First, while it may seem like nothing has been happening in fiscal policy since gridlock took over, this recent report from two of my CBPP colleagues shows otherwise. Austere budget caps in place since 2011 have for years chipped away at vital services. To be clear, I’m not talking proposals; I’m talking actual outcomes. For example:
— Programs that help low-income, working parents pay for child care now serve fewer than 1 in 6 eligible children due to insufficient funding. Because funding has not kept pace with costs, 373,000 fewer children get child care assistance than in 2006.
— Real funding for core state grants for job training and employment services have fallen by 19 percent since 2010, and 40 percent since 2001.
— Environmental Protection Agency funding for programs that help localities upgrade and replace aging drinking water and wastewater treatment infrastructure is down 35 percent in real terms since 2001, with demonstrable, terrible impacts.
— Rental assistance to help low-income households serves only 1 in 4 eligible households due to funding limitations, while the number of low-income households that either pay more than half of their income for rent or live in severely substandard housing has risen 63 percent since 2001.
— Internal Revenue Service and Social Security Administration funding fell 18 and 11 percent between 2010 and 2017 in real terms. Reduced staffing is generating longer waits for service at both agencies, fewer IRS audits and less tax law enforcement (the latter is obviously a feature, not a bug, for those behind such cuts).
In other words, budget cuts are already meting out real damage. The Trump budget may not be going anywhere but to the extent that it creates any momentum, it’s in the wrong direction.
Second, one of the more important numbers in this budget is “3.” That’s the real GDP growth rate we’re told the administration is going to plug in as their forecast. It’s only one percentage point above the current trend growth rate, so it doesn’t sound like a big reach. But that’s what it is. There are no policy levers that could boost GDP growth by a point, and the ones the administration is proposing — trickle-down tax cuts and financial market and environmental deregulation — have no growth track record at all.
In fact, this is just a cynical ploy to claim over $3 trillion in extra revenue spun off by the higher growth forecast. The official scorekeepers won’t accept it, so we’ll soon be hearing about seas of debt engendered by this budget. But be forewarned: When you hear administration officials claiming their tax cuts will be offset by growth effects, they’re wrong.
Toward the end of his presidency, President Barack Obama was sending Congress progressive budgets, which the congressional majority refused to even look at. Though President Trump is poised to propose the polar opposite plan, it won’t become law either. And yet, given that it is largely in sync with the dark vision of contemporary conservatives — to transfer government resources from the poor and the middle-class to the rich — I fear it will become part of the fiscal conversation, benighted though that conversation may be.