President Trump unveiled his 2020 budget blueprint on Monday, proposing to spend a record $4.75 trillion next year while also cutting $2.7 trillion is spending over 10 years. Here's the big picture on Trump's budget:
It won’t mean much on Capitol Hill: Trump’s proposal has no chance of being adopted by Congress. “To call what he has outlined a ‘dead on arrival budget’ would be extremely kind. It is a ‘dead before departure budget,’” former New Hampshire senator Judd Gregg wrote at The Hill in response to a preview by the White House’s acting budget director. “The absurdity of this proposal is only exceeded by its irrelevance.” But don’t ignore the new budget completely — view it as more of a political document, outlining the president’s priorities heading into the 2020 election campaign.
Not surprisingly, the proposed cuts to health care, environmental and other programs quickly drew criticism from Democrats. “The budget confirms what we already knew about the Republicans’ $1.9 trillion tax scam: it does not pay for itself, it will increase the deficit, and to help fill in the enormous hole they have created, Republicans will demand cuts to programs upon which working Americans, our economy, and national security rely,” House Budget Committee Democrats said in a press release.
Lawmakers are likely to ignore Trump and work out their own budget deal: “Recent spending deals have involved Democrats accepting big Pentagon funding increases pushed by Republicans, in exchange for GOP support for comparable domestic investments,” The Washington Post says. “Lawmakers expect that they will ultimately reach an agreement along similar lines this time, too, which would amount to a bipartisan repudiation of the president’s budget blueprint — although Democrats intend to push for even higher levels of nondefense domestic spending now that they control the House.”
It relies on some problematic economic assumptions: The budget says that Trump’s economic policy, including tax cuts and deregulation, will spur a sustained growth rate of 3 percent a year through 2024, with growth slowing slightly in the five years after that. Those projections are much rosier — about a percentage point better, in fact — than the forecasts from most independent analysts, who expect growth to wane much more quickly as the short-term boosts from tax cuts and spending increases wear off. “Absent these rapid growth assumptions, debt under the President's budget would likely be about $2 trillion higher by 2029,” the Committee for a Responsible Federal Budget calculates.
And some unrealistic spending cuts: On top of that, the budget’s non-defense spending cuts are simply unrealistic. CRFB notes that “the budget assumes non-defense discretionary spending will fall 9 percent between 2019 and 2020, and 26 percent by the end of the decade — despite inflation increasing overall prices by 26 percent.” The budget also proposes extending the individual tax cuts set to expire under the GOP’s 2017 law, but it hides the impact of that extension by incorporating the $1.1 trillion cost into its baseline.
So the promised deficit reduction is likely unattainable: The budget projects smaller deficits starting in 2021, with the budget reaching balance in 15 years. But more sober economic projections combined with more practical assessments of possible spending cuts would produce a far smaller reduction in the deficit. “A realistic assessment of the President's budget is unlikely to show anywhere close to the deficit reduction needed to put the debt on a sustainable path,” CRFB said. The group estimates that the Trump budget would add more than $10 trillion to the national debt.
It’s setting up another border battle, and possibly a shutdown fight: The administration is requesting $8.6 billion in border wall funding, which would reportedly allow for 722 miles of barriers. The budget also includes $3.6 billion to pay back military construction projects affected by Trump’s declaration of a national emergency. Democrats say there’s no chance Trump will get the wall money he wants. “Congress refused to fund his wall, and he was forced to admit defeat and reopen the government,” House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement. “The same thing will repeat itself if he tries this again. We hope he learned his lesson.”
Analyst Chris Krueger of the Cowen Washington Research Group summed up the outlook: “Congress does not want to go through another shutdown fight, has limited interest in weaponizing the debt ceiling, and collectively wants to spend a lot more money to lift the Budget Control Act caps on defense and non-defense spending to avoid the sequester...but that does not also apply to President Trump and Acting Chief of Staff Mick Mulvaney who want to fund the Border Wall, cut non-defense spending, jack-up defense spending, and prioritize payments post debt ceiling X-Date." That could add up to another showdown.
