Economic Editor at ThinkProgress. Contact me: email@example.com
1 hr ago
By increasing money for defense, everything else will have to be cut drastically.President Trump is expected to release his outline for federal government spending on Monday, and according to multiple news outlets, he will increase defense funding by $54 billion while leaving Social Security and Medicare as is.
Trump’s Treasury Secretary, Steven Mnuchin, confirmed to Fox on Sunday that entitlement programs like Social Security and Medicare won’t be addressed in the budget document. “We are not touching those now,” he said.
But by increasing costs on one side of the ledger?—?defense spending?—?and not addressing some of the biggest drivers of government spending—Social Security and Medicare—Trump’s budget will almost certainly involve enormous and debilitating cuts to everything else if it doesn’t want to drive up the deficit. Indeed, the administration said on Monday morning that most so-called non-defense discretionary programs?—?everything other than entitlements and defense?—?will be cut substantially to pay for the rest.
According to the New York Times and Bloomberg, one big target will be the Environmental Protection Agency, whose workforce could be cut to a third of its current size. The administration also pointed to foreign aid as another place for cuts.
Previous reports have named a number of other programs that could be on the chopping block—defunded to the point of wholesale elimination. AmeriCorps; the National Endowment for the Arts, the National Endowment for the Humanities, and the Corporation for Public Broadcasting; the Department of Justice’s Legal Services Corporation and Violence Against Women Grants; the Office of National Drug Control Policy; funding for the Paris Climate Change Agreement and the United Nations’ Intergovernmental Panel on Climate Change; the Export-Import Bank; and the Office of Energy Efficiency and Renewable Energy, Office of Electricity, and Office of Fossil Energy, among others, could all be zeroed out.
Even so, these cuts wouldn’t get very far toward helping cover Trump’s other priorities, given that most of those programs cost less than $500 million a year out of a government that spends $3.9 trillion. All told, the savings would only come to about $2.5 billion.
By contrast, an earlier report said that Trump’s budget would cut $10.5 trillion in federal spending over a decade. That represents a far deeper reduction than any past Republican plans; the budget proposal put forward by Republicans on the House Budget Committee last year called for a $5.5 trillion cut in spending over the same timeframe, which was already higher than any previous version.
On Monday, the president characterized his plan as one of rerouting resources. “We are going to do more with less and make the government lean and accountable to the people,” Trump said. “We can do so much more with the money we spend.”
But if all of that pain has to be born by non-defense, non-entitlement programs while also making up for an increase for the Defense Department, the results will be devastating for an untold number of government functions.
Non-defense discretionary spending encompasses a huge range of government services, from law enforcement to the environment to low-income assistance. “It includes a lot of things that are important for promoting economic growth in the longer term like research, but also promoting opportunity for those who may be left out of the economy,” Sharon Parrott, vice president for budget policy and economic opportunity at the Center on Budget and Policy Priorities (CBPP), told ThinkProgress. “It’s where job training is, it’s where education funding is.”
The CBPP’s analysis of a blueprint written by the Heritage Foundation, reportedly being used by the Trump administration as a guide, found that any programs other than Social Security and Medicare would be reduced by $3.8 trillion over a decade. For example, Supplemental Security Income that assists low-income children with disabilities would be eliminated and food stamps would be drastically reduced. But even those cuts wouldn’t go far enough, as the Heritage outline also cut back on Social Security and Medicare.
No matter what Trump puts in his budget outline, it doesn’t necessarily mean it’ll become law. Government agencies targeted for cuts will push back. Spending bills also have to originate with Congress and pass a 60-vote threshold in the Senate.
Congress would also have to lift current restrictions that cap increases on defense and non-defense spending that became law thanks to what became known as sequestration in the 2011 Budget Control Act. The full effect of the spending caps has yet to go into effect thanks to a number of bipartisan Congressional deals, but they are scheduled to hit in 2018 and will already seriously hamper these programs.
“Just living at sequestration levels would be very damaging,” Parrott said. “That by itself would be extraordinarily damaging and be counter to the idea of investing in key public services that help everyday Americans.”
Trump’s budget document will reportedly assume the economy will grow at 2.4 percent this year, higher than the 2.1 percent forecast made by the Congressional Budget Office. It was also previously reported that the Trump administration had asked its economic advisers to start with a GDP growth target of between 3 and 3.5 percent for the next decade and then fill in budget numbers to get there, even though budget making is typically done the other way around.
Mnuchin has said that the administration thinks it can get 3 percent annual GDP growth through tax cuts and regulatory relief, although there’s scant evidence that tax cuts fuel the economy.