President Trump released a new budget on Monday that proposes huge cuts to domestic spending even as it boosts the Pentagon’s account and calls for $8.6 billion in new funding for a wall on the Mexican border.
The budget is essentially dead on arrival in the Democratic House, but it will shape a series of policy fights this year that could lead to 2019 ending where it began: with a shutdown.
Here are five takeaways.
Trump sees wall fight as political winner
The partial government shutdown triggered by Trump’s demands for a wall ended in his retreat.
He opened the government, and then signed a funding measure that fell far short of his demands. He and Congress are now waging war over his emergency declaration to find more funds for the wall.
{mosads}Despite the losses, the new budget shows Trump is not backing down as he signals to his supporters that he will never give in on the wall.
A little more than a year before his reelection effort will be in high gear, Trump is asking for $8.6 billion to cover 277 miles of wall.
Trump is upping the ante on the central theme of his 2016 campaign, betting it will keep his most loyal supporters behind him while providing arguments to throw at Democrats.
The question for many will be what will happen later this year, when House Democrats do not include money for the wall in their new appropriations measures.
Debt doesn’t matter to Trump
Budget watchdogs say the new budget shows Trump doesn’t really care about a deficit that has ballooned under his administration’s tax cuts and increased spending.
The budget would extend the tax cuts, adding more than $1 trillion in debt over the next four years. That’s in addition to the $1.9 trillion created by the law itself over the next decade.
The White House argued on Monday that cuts to discretionary domestic spending will help offset the tax cut’s costs, but outside observers say the spending targeted for cuts doesn’t reflect the main drivers of national debt.
“The vast majority of spending reductions are in nondefense discretionary programs, but this spending is not a driver of our growing debt and is already near historic lows as a share of [gross domestic product],” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a budget watchdog group. Peterson later clarified that nondefense discretionary programs were “a large portion,” of the reductions, not the vast majority.
The Committee for a Responsible Federal Budget said the cuts in the administration’s budget may be “unrealistic.”
It includes proposed cuts of more than 30 percent for the Environmental Protection Agency (EPA) and over 20 percent for the State Department and Transportation Department. Nondefense cuts total 9 percent in one year, and would deepen to 26 percent over a decade, even as the population continues to grow.
Meanwhile, Trump vows to spend more at the Pentagon.
Trump’s first two budgets balanced in 10 years, even if they relied on unrealistic economic assumptions to do so. This year’s wouldn’t balance until fiscal 2034 — but would still rely upon unlikely economic growth.
The Committee for a Responsible Federal Budget forecast the budget would add over $10 trillion to the debt.
It relies on inflated economic expectations
Administration officials have touted “MAGAnomics” in the past to argue the economy would pay for Trump’s budgets.
And to be fair, Trump has benefited from a relatively strong economy since becoming president.
But it is an economy that is falling short of the administration’s promises — which means the budgetary goals aren’t going to be reached.
In 2017, annual growth for the year reached 2.3 percent, and last year it reached 2.9 percent, but it has yet to surpass the 3 percent target for a full year. Economists are also warning that growth could taper off now that the stimulus provided by the tax cuts is wearing off.
The nonpartisan Congressional Budget Office projected the economy would grow by 2.3 percent in 2019 and drop to an average of 1.7 percent through 2023. The Federal Reserve has growth hovering at 2 percent or below from 2020 on.
Trump’s latest budget projects the economy will grow at or above 3 percent over the next decade, an assumption key to keeping the White House’s deficit projections in line.
The budget is not going anywhere with Congress
Presidential budgets are pretty much always dead on arrival, since Congresses under both parties are loath to turn over all their spending powers to the executive.
Still, this year’s Trump budget is even more dead than normal given the Democratic majority in the House and the antipathy between the two sides following the shutdown fights, the emergency declaration on the wall and the daily insults — including Trump’s statement last week that Democrats are an “anti-Jewish” party.
“This is a budget that we will not take seriously when we are working on our budget and spending priorities for 2020,” said House Budget Committee Chairman John Yarmuth (D-Ky.)
“The Trump budget has no chance of garnering the necessary bipartisan support to become law,” said House Appropriations Committee Chairwoman Nita Lowey (D-N.Y).
Even Republicans acknowledge that the proposal is merely a suggestion.
Senate Budget Committee Chairman Mike Enzi (R-Wyo.) referred to the plans as a “first step,” while Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) simply said he would “carefully review” it.
Trump’s base is still his most important audience
The president’s budget proposal was a stark reminder that his political base is his most important audience.
The proposal is riddled with red meat for dedicated GOP voters.
It includes promises to repeal and replace ObamaCare and to institute work requirements for anti-poverty programs such as food stamps. It puts money toward school voucher programs and proposes $2.7 trillion worth of cuts to government programs over a decade.
It slashes funds to the State Department and takes a butcher knife to the EPA, going after regulations.
It boosts spending for the Department of Homeland Security and Veterans Affairs Department, and proposes some funds for Trump’s long-promised infrastructure plan.
If that isn’t clear enough, the document’s subtitle fills in the blanks: “Promises kept. Taxpayers first.”
Updated on March 13 at 1:43 p.m.