President Trump’s 2017 Budget Proposal

JoshuaDomestic Policy, FP Columns

Skinny Budget


The White House is putting its “America First” agenda front and center, unveiling a budget Thursday that pumps $54 billion more into the Pentagon and protecting the nation’s borders, while sharply slashing domestic and discretionary spending.

The $1.1 trillion budget proposal sent to Congress represents a significant rollback of the federal workforce and imposes deep and dramatic cuts in order to offset the additional defense spending. The axe falls heavily on the Environmental Protection Agency, the Agriculture Department and the State Department.

NBC News

To pay for an increase in defense spending, a down payment on the border wall and school voucher programs, among other things, funding was cut from the discretionary budgets of other executive departments and agencies. The Environmental Protection Agency, the State Department and the Agriculture Department took the hardest hits. The proposal also eliminates funding for these 19 agencies.
Washington Post

“Our moral duty to the taxpayer requires us to make our government leaner and more accountable,” Trump said last week before he unveiled his first budget proposal. “We must do a lot more with less.”

That’s not a controversial proposition. Members of Congress and public management experts from both parties agree with it. The federal bureaucracy, hamstrung by rules from the last century, is way behind the private sector in management practices. Even federal workers think so. In the government’s last employee survey, more than half said their organizations don’t do enough to reward innovation or weed out poor performers.
Times Leader

There are big winners and big losers in Trump’s first budget plan – if approved by Congress. Military spending would increase by nine percent to $54bn, while 18 other agencies will experience budgets cuts.

For instance, the Department of State could see its budget fall by about 28 percent, which would have big international implications – impacting the funding of foreign aid, the UN and peacekeeping missions.

International efforts to tackle climate change could be dealt a blow with the Environmental Protection Agency losing over 30 percent of its budget.

Liberals and lobby groups will complain that those are crucial programs. But if they are, then state governments should step in and fund the programs themselves. After all, the funding for federal aid ultimately comes from taxpayers who live in the 50 states — there is no magic money tree in Washington.

Indeed, it is more efficient for the states to fund their own local activities — such as school and antipoverty programs — because doing so eliminates the expensive federal middleman. By ending numerous federal aid programs, the Trump budget would cut the need for high-paid bureaucrats in Washington to administer the money going back to the states. It would also free the states from costly federal regulations that are tied to aid programs.

Trump’s proposals are still just that. Congressional members from both parties, who will ultimately decide the 2018 budget, have promised to protect the program.

The White House was “literally taking food away from seniors,” said Rep. Linda T. Sánchez, D-Calif., according to the Associated Press.

Rep. Gus M. Bilirakis, R-Fla., said he ran Meals on Wheels deliveries himself.

But defending its proposals, Office of Management and Budget Director Mick Mulvaney said the government “can’t spend money on programs just because they sound good – and great.”
Mercury News

“Unfortunately, we have no alternative but to reinvest in our military and make ourselves a military power once again,” White House National Economic Council Director Gary Cohn told Fox News Sunday.
Voice of America

Even Republicans in Congress said they didn’t like it much. One GOP senator said the State Department cuts were “dead on arrival,” suggesting that, even more than other presidents’ budgets, this one is likely to be remembered only as a wish list. Congress, not the president, makes the real decisions on budgets and spending, and all of the programs Trump wants to slash are sacred to somebody on Capitol Hill.

But Trump took a second big action last week: He signed an executive order calling for a major reorganizing of the federal bureaucracy. He asked agencies and the public to suggest programs that could be eliminated, slimmed down or combined. And he gave Mulvaney one year to produce a comprehensive plan.

If that sounds vague, it’s because it is.

The first problem with Trump’s order, Light said, is that federal agencies are unlikely to come up with creative plans to reorganize or downsize themselves.

That’s why earlier efforts at reorganization often started with a president assembling an outside commission or a White House task force. Trump hasn’t done that. And there doesn’t seem to be anyone on his staff who’s a natural reinventor, even though the president has appointed plenty of people from the private sector. Mulvaney is a former congressman with a fearsome reputation as a budget cutter, but not as a reformer. “You’ve got a bunch of real estate developers, investment bankers and members of Congress,” Light said. “They may be very smart people, but they are all from very flat organizations” — unlike the very un-flat bureaucracy.

There is one other place Trump could look for management expertise: Congress. Don’t laugh.

Rep. Jason Chaffetz, R-Utah, has been working on ideas to reform the bureaucracy for several years. His proposals include offering a buyout to federal workers to encourage more retirements, and then filling only one in three of the jobs that come open. More boldly, he’s talked about increasing salaries for high-achieving bureaucrats in a pay-for-performance system. But getting any of those ideas through the Senate would require bipartisan cooperation, and neither Trump nor Chaffetz has worked very hard on that.
Times Leader

According to most analysts, that means Trump will likely continue to run a budget deficit.

-Voice of America

“It’s no different than every other family in America that has to make the tough decisions when they need to spend money somewhere, they have to cut it from somewhere else,” Cohn said.

Defense spending

In a blueprint released last month, White House officials said Trump intends to boost the military budget by $54 billion – one of the largest ever increases in national defense spending. This week’s proposal will outline how the president intends to pay for it.

According to budget documents leaked to the media, Trump will offset the military costs with far-reaching reductions in discretionary spending — the part of the budget that pays for various federal government agencies.

Trump is reportedly considering slashing up to 25 percent of the Environmental Protection Agency budget, 30 percent of the Energy Department budget, and 37 percent of the State Department and foreign aid budget.

Reduction in federal workforce

If passed, those cuts would result in a massive reduction of the federal government workforce, which Trump and his fellow Republicans have long said is bloated and inefficient. It is not clear, however, whether Trump’s plans would actually fulfill his campaign promise to reduce the national debt.

That won’t be clear until May, when the White House releases its plans to reform the tax code and its proposals for mandatory spending, which covers existing programs like Medicare and Social Security.

Trump has said it is not politically possible to reduce spending on Medicare and Social Security – which together account for nearly 40 percent of the federal budget. He is also considering a $1 trillion infrastructure plan to upgrade the country’s roads, airports and rail lines.

According to most analysts, that means Trump will likely continue to run a budget deficit.

The federal debt is expected to grow by nearly $10 trillion over the next decade, according to a recent projection by the nonpartisan Congressional Budget Office.

Daily Caller

In Conclusion

President Trump will face difficulty getting this proposal through Congress, where the threat of automatic spending cuts known as sequestration has acted as a brake on military spending. And many American military officials — the defense secretary included — have denounced efforts to cut foreign aid in favor of more defense spending. Many foreign aid programs, those officials say, contribute to global stability and are seen as important in helping avoid future conflicts.
New York Times

Given the high concentration of federal jobs surrounding the capitol, he estimates employment in Washington D.C. area could fall by 1.8%, personal income by 3.5%, and lower home prices by 1.9%.

In contrast, areas of the country that could benefit are places with a high concentration of military jobs and veterans, like Virginia, Southern California, parts of Florida, and Texas.

This is the message the President wanted to send to the public, to the press, to Capitol Hill: he wants more money for defense; more money for border enforcement; more money for law enforcement generally; more money for the vets; more money for school choice. And then to offset that money with savings elsewhere so that all of that is done without an additional dollar added to the deficit.
Office of Management and Budget Director Mick Mulvaney

Modified: March 20, 2017

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