Trump budget plan already outdated after budget deal

FILE: President Donald Trump (Photo: Donald J. Trump/Facebook)

WASHINGTON — In a twist on Washington’s truism about presidential budgets being D.O.A., President Donald Trump’s 2019 fiscal plan due Monday is dead even before arrival.

The original plan was for Trump’s new budget to slash domestic agencies even further than last year’s proposal, but instead it will land in Congress three days after he signed a two-year spending agreement that wholly rewrites both last year’s budget and the one to be released Monday.

In a preview of the 2019 budget, the White House on Sunday focused on Trump’s $1.5 trillion plan for the nation’s crumbling infrastructure. He also will ask for a $13 billion increase over two years for opioid prevention, treatment and long-term recovery. A request of $23 billion for border security, including $18 billion for a wall along the U.S.-Mexico border and money for more detention beds for detained immigrants, is part of the budget, too.

Trump’s latest submission was completed before the budget pact delivered the nearly $300 billion increase above prior “caps” on spending. The $4 trillion-plus 2019 budget was originally designed to double down on last year’s proposals to slash foreign aid, the Environmental Protection Agency, home heating assistance and other nondefense programs funded by Congress each year.

“A lot of presidents’ budgets are ignored. But I would expect this one to be completely irrelevant and totally ignored,” said Jason Furman, a top economic adviser to President Barack Obama. “In fact, Congress passed a law week that basically undid the budget before it was even submitted.”

Trump would again spare Social Security retirement benefits and Medicare as he promised during the 2016 campaign. And while his plan would reprise last year’s attempt to scuttle the “Obamacare” health law and sharply cut back the Medicaid program for the elderly, poor and disabled, Trump’s allies on Capitol Hill have signalled there’s no interest in tackling hot-button health issues during an election year.

Instead, the new budget deal and last year’s tax cuts herald the return of trillion dollar-plus deficits. Last year, Trump’s budget predicted a $526 billion budget deficit for the 2019 fiscal year starting Oct. 1; instead, it’s set to exceed $1 trillion once the cost of the new spending pact and the tax cuts are added to Congressional Budget Office projections.

Mick Mulvaney, the former tea party congressman who runs the White House budget office, said Sunday that Trump’s new budget, if implemented, would tame the deficit over time, though unlike last year’s submission, it wouldn’t promise to balance the federal ledger eventually.

“The budget does bend the trajectory down, it does move us back towards balance. It does get us away from trillion-dollar deficits,” Mulvaney said on “Fox News Sunday.” “Just because this deal was signed does not mean the future is written in stone. We do have a chance still to change the trajectory. And that is what the budget will show tomorrow.”

Last year, Trump’s budget projected a slight surplus after a decade, but critics said it relied on an enormous accounting gimmick — double counting a 10-year, $2 trillion surge in revenues from the economic benefits of “tax reform.” Now that tax reform has passed, the math trick can’t be used, and the Trump plan doesn’t come close to balancing.

Trump’s infrastructure plan would put up $200 billion in federal money over the next 10 years to leverage $1.5 trillion in infrastructure spending, relying on state and local governments and the private sector to contribute the bulk of the funding.

Critics contend the infrastructure plan will fail to reach its goals without more federal support. Proposals to streamline the permitting process as a way to reduce the cost of projects have already generated opposition from environmental groups.

The budget’s call for increased border security funding would probably depend on Congress passing legislation to deal with young immigrants brought to the country illegally. The Senate was set Monday to begin debate on immigration policy, the fate of the so-called Dreamers a central question.

The White House budget office said Friday that Monday’s submission would reflect stringent limits on appropriated spending — that’s the more than $1 trillion spent each year for agency operations — that were the hangover from a failed 2011 budget deal. Last year, Trump promised a $54 billion, 10 per cent increase for the Pentagon, financed by an equal cut to foreign aid and domestic agencies.

What Congress instead delivered on Friday was a budget law would instead increase defence by $80 billion this year and boost nondefense appropriations by $63 billion. For the 2019 budget year submitted on Monday — and Trump’s plan as originally devised would adhere to the old limits — Congress has already shattered the spending cap by $153 billion.

“Our leadership caved. The swamp won. And the American taxpayer lost,” said Rep. Mark Meadows, R-N.C., on CBS’ “Face The Nation.”

Presidential budgets tend to reprise many of the same elements year after year. While details aren’t out yet, Trump’s budget is likely to curb crop insurance costs, cut student loan subsidies, reduce pension benefits for federal workers and cut food stamps, among other proposals.

Such cuts went nowhere in Congress last year as Republicans focused on trying to repeal and replace Obama’s Affordable Care Act and, after that failed, turned their sights to a successful rewrite of the tax code.

But the election in December of Alabama Democrat Doug Jones to the Senate seat cut the GOP’s margin of control to 51-49. Majority Leader Mitch McConnell, R-Ky., says the chamber won’t tackle politically toxic cuts to so-called mandatory programs.