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U.S. may add deficits of $7.2 tril. in 10 yrs

Reuters

U.S. President Donald Trump holds a meeting on his infrastructure initiative at the White House in Washington on Monday.

The Associated PressWASHINGTON (AP) — U.S. President Donald Trump unveiled a $4.4 trillion budget plan Monday that envisions steep cuts to America’s social safety net but mounting spending on the military, formally retreating from last year’s promises to balance the federal budget.

The president’s spending outline for the first time acknowledges that the Republican tax overhaul passed last year would add billions to the deficit and not “pay for itself” as Trump and his Republican allies asserted. If enacted as proposed, though no presidential budget ever is, the plan would establish an era of $1 trillion-plus yearly deficits.

The open embrace of red ink is a remarkable public reversal for Trump and his party, which spent years objecting to President Barack Obama’s increased spending during the depths of the Great Recession. Rhetoric aside, however, Trump’s pattern is in line with past Republican presidents who have overseen spikes in deficits as they simultaneously increased military spending and cut taxes.

“We’re going to have the strongest military we’ve ever had, by far,” Trump said in an Oval Office appearance Monday. “In this budget we took care of the military like it’s never been taken care of before.”

Trump’s budget revived his calls for big cuts to domestic programs that benefit the poor and middle class, such as food stamps, housing subsidies and student loans. Retirement benefits would remain mostly untouched by Trump’s plan, as he has pledged, though Medicare providers would absorb about $500 billion in cuts — a nearly 6 percent reduction. Some beneficiaries in Social Security’s disability program would have to re-enter the workforce under proposed changes to eligibility rules.

While all presidents’ budgets are essentially dead on arrival — Congress writes and enacts its own spending legislation — Trump’s plan was dead before it landed. It came just three days after the president signed a bipartisan agreement that set broad parameters for spending over the next two years. That deal, which includes large increases for domestic programs, rendered Monday’s Trump plan for 10-year, $1.7 trillion cuts to domestic agencies such as the departments of Health and Human Services, Agriculture and Housing and Urban Development even more unrealistic.

The White House used Monday’s event to promote its long-awaited plan to increase funding for infrastructure. The plan would put up $200 billion in federal money over the next 10 years in hopes of leveraging a total of $1.5 trillion in infrastructure spending, relying on state and local governments and the private sector to contribute the bulk of the funding.

Trump’s plan aims at other familiar targets. It would eliminate the Corporation for Public Broadcasting, the National Endowment for the Arts and National Endowment for the Humanities, and the Institute of Museum and Library Services. The administration wants NASA out of the International Space Station by 2025 and private businesses running the place instead.

But the domestic cuts would be far from enough to make up for the plummeting tax revenue projected in the budget.

Trump’s plan sees a 2019 deficit of $984 billion, though White House Budget Director Mick Mulvaney admits $1.2 trillion is more plausible after last week’s congressional budget pact and $90 billion worth of disaster aid is tacked on. That would be more than double the 2019 deficit the administration promised last year.

All told, the new budget sees accumulating deficits of $7.2 trillion over the coming decade; Trump’s plan last year projected a 10-year shortfall of $3.2 trillion. And that’s assuming Trump’s rosy economic predictions come true and Congress follows through — in an election year — with politically toxic cuts to social programs, farm subsidies and Medicare providers.

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