Trump2018Buget MarkWilson/GettyImages
Copies of President Trump's overview of budget priorities for FY2018, 'America First: A Budget Blueprint to Make America Great Again.' are put on display at the Government Publishing Office (GPO) and the Office of Management and Budget, on March 16, 2017, in Washington, DC.

Trump's first budget slashes USDA spending $7.3 billion

The Pentagon and Department of Homeland Security showered with new resources.

by Justin Sink and Erik Wasson

President Donald Trump is proposing historically deep budget cuts that would touch almost every federal agency and program and dramatically reorder government priorities to boost defense and security spending, although it’s likely to face a fight in Congress.

The president’s fiscal 2018 budget request, which will be formally delivered Thursday to U.S. lawmakers, would slash or eliminate many of the Great Society programs that Republicans have for decades tried to peel back while showering the Pentagon and Department of Homeland Security with new resources.

House Speaker Paul Ryan said in a statement Thursday he welcomed the Trump blueprint because it “turns the page from the last eight years” of President Barack Obama, though he did not go as far as endorsing specific, individual department reductions. Senate Minority Leader Chuck Schumer issued a statement saying the plans would be “devastating to the middle class” and that Democrats will “emphatically” oppose the cuts and urge Republicans to oppose them as well.

Some of the deepest cutbacks are reserved for the agencies and programs Trump has often derided. The State Department would be hit with a 28% reduction below fiscal 2016 levels that mainly targets international aid and development assistance; the Environmental Protection Agency would face a 30% reduction. Also in the crosshairs are agriculture programs, clean energy projects and federal research funding.

“You see reductions in many agencies as he tries to shrink the role of government, drive efficiencies, go after waste, duplicative programs,” Office of Management and Budget Director Mick Mulvaney told reporters Wednesday.

Mulvaney said on MSNBC Thursday that the budget team listened to Trump’s campaign promises and “turned his words, his policies into numbers. So folks who voted for the president are getting exactly what they voted for.” 

Ryan said in his statement that congressional Republicans “are determined to work with the administration to shrink the size of government, grow our economy, secure our borders, and ensure our troops have the tools necessary to complete their missions. I look forward to reviewing this with the Appropriations Committee and our entire conference.”

Lawmakers Resist
Trump’s proposal for $1.15 trillion in federal discretionary funding for fiscal year 2018 is certain to face vigorous opposition from lawmakers in both parties who will resist chopping favored programs, whether foreign aid, rural water projects, or development grants for Appalachia and the Mississippi Delta. In addition to a solid wall of opposition from Democrats, senior Republicans including Senate Majority Leader Mitch McConnell have raised objections to specific agency cuts even before the budget request went to the Capitol.

Schumer said the budget plan “shifts the burden off of the wealthy and special interests and puts it squarely on the backs of the middle class and those struggling to get there.” He said investments in infrastructure, education and scientific research that are getting “clobbered” are among “the very programs that most help the middle class.”

The proposal codifies Trump’s “America First” approach to governance -- the budget document was even titled with the campaign slogan -- and underscores his priorities to allies in Congress in a document that bears close resemblance to a proposal put forward last year by the conservative Heritage Foundation. It would provide a promised increase in military spending without expanding the deficit.

“To keep Americans safe, we have made the tough choices that have been put off for too long,” Trump said in a statement accompanying the budget. “But we have also made the necessary investments that are long overdue.”

The blueprint doesn’t include answers to some of the biggest outstanding questions about Trump’s plans. The document, a partial budget request that presidents typically release in their first months in office, doesn’t account for his proposals to cut taxes, resolve internal Republican disputes over entitlement spending, or reveal what the White House forecasts for economic growth. That is to come as part of a larger document in May.

The calculations in this article are based on the enacted spending levels for fiscal 2016, the last year for which the government was fully funded. The government is operating now on stopgap funding in fiscal 2017 that only runs through April 28. The calculations in the White House request assume Congress will extend spending at the same levels through the end of the fiscal year on Sept. 30. As lawmakers negotiate that package at the end of next month, the numbers for some agencies may be subject to change. 

Although Trump’s budget would decrease total discretionary spending one percent from fiscal 2016 -- the last full-year spending legislation passed by Congress -- it doesn’t substantially change the outlook for the deficit. The Congressional Budget Office projects the fiscal 2018 shortfall will be $487 billion. 

Nine federal departments would see their budgets slashed by between 11% and 29%.

Funding for the Department of Health and Human Services would be slashed by $19.5 billion, the State Department would see its budget cut $10.8 billion, the Labor Department would incur a $2.6 billion paring, and the Department of Agriculture would see reductions of $7.3 billion. Each represents a more than 20% cut compared to the last full fiscal year under Obama.

By contrast, the Pentagon would see a $52.3 billion -- or 10% -- increase, with the Department of Homeland Security’s $3 billion hike representing a more than 7% increase. Because of the deep domestic cuts, the explosive growth of the president’s security budget won’t increase the baseline deficit projection for the coming year.

Congress will need to agree to a stopgap spending gap before then to avoid a shutdown of most of the federal government. In addition to its budget for the following year, the White House revealed it would ask lawmakers to complete the remaining 11 funding bills for the current fiscal year by the April 28 deadline in a way that will boost defense by $30 billion and border security by $3 billion while cutting other programs by $18 billion. 

Of that, $1.5 billion would be used for a pilot program examining different ways to construct the president’s proposed border wall with Mexico. That amount would increase to $2.6 billion over the full 2018 fiscal year. 

Trump promised to make Mexico pay for a wall, but no one in the administration has spelled out how the Mexican government -- which staunchly opposes picking up the tab -- could be compelled to do so. On Wednesday, Mulvaney acknowledged the administration would initially be asking the U.S. Treasury to foot the bill.

Congressional Input
As details of the budget blueprint leaked out over the past several weeks, Republican spending panel members also made clear that they, rather than Trump, would be shaping the bills needed to fund the government. 

“As I always say, the president proposes and Congress disposes,” said Robert Aderholt, an Alabama Republican who chairs the House subcommittee that writes the USDA funding bill. He said he knows cuts need to be made but plans on tailoring them.

Senator Lindsey Graham, a South Carolina Republican whose subcommittee oversees the State department budget, this month called the proposed cuts “dead on arrival.” McConnell said that such deep cuts to State, which he personally opposes, would “probably not” be able to pass the Senate.

“When we get to funding the government, obviously it will be done on a bipartisan basis,” he said.

If adopted, the budget would mean significant reductions in the federal workforce, another Trump promise.

“You can’t drain the swamp and leave all the people in it,” Mulvaney said. Asked about the possible impact on the Washington, D.C. region, where a high number of federal jobs are concentrated, the OMB director told reporters in Washington that “we did not write this budget with an eye to the value of your condo.”

His comments were emblematic of the president’s approach, which favored outsourcing the functions of government to state and local officials or the private sector whenever possible.

The budget also proposes to eliminate funding for scores of programs.

Mulvaney on MSNBC said the litmus test his team used was, “Can we really continue to ask a coal miner in West Virginia or a single mom in Detroit to pay for these programs and the answer is, ‘No.’ We can ask them to continue to pay for defense, and we will, but we can’t continue to ask them to pay for the Corporation for Public Broadcasting.” 

Among the winners in the budgeting process were school choice programs in the Department of Education budget - which saw $1.4 billion in new spending for school choice programs - as well as the Department of Veterans Affairs, where a $7.3 billion increase would expand a program allowing eligible veterans to seek private health care.

Trump’s budget also proposes privatizing the federal air traffic control system, authorizing a multiyear program to create an independent non-governmental organization to manage the nation’s 14,500 air traffic controllers. During a meeting with airline executives in February, Trump heard complaints about an outdated air traffic control system, and showed support for privatizing the system.

And the plan reduces funding for multilateral development banks like the World Bank by $650 million. The cuts, which include reductions to U.S. participation in the International Monetary Fund, are part of a broader effort by the Trump administration to step back from foreign aid. Trump has said repeatedly that other countries take advantage of the U.S. and need to pay their fair share.

With the president’s blueprint facing a steep climb on Capitol Hill, attention will likely shift to which elements of the package are taken up by congressional Republicans. The substantial increase in defense spending is likely to earn praise from even those lawmakers critical of the president’s proposed cuts. That could portend a push by the GOP to jack up security budgets, even if they can’t corral the votes to slash other discretionary programs.

Mulvaney said the president had made his priorities clear, but the White House was willing to listen to lawmaker ideas on how to accomplish his goals.

“This is not take it or leave it. We don’t do that with an executive budget,” Mulvaney said. “If they’re interested in engaging in that conversation, we will -- in fact, we started that conversation.”

--With assistance from Toluse Olorunnipa.

To contact the reporters on this story: Justin Sink in Washington at [email protected]; Erik Wasson in Washington at [email protected]

To contact the editors responsible for this story: John Voskuhl at [email protected]

Elizabeth Wasserman, Elizabeth Titus

© 2017 Bloomberg L.P

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