White House releases budget, forecasts a decade of mounting debt

2018-02-13 | Tribune Washington Bureau

WASHINGTON _ The Trump administration proposed a spending plan Monday that projects deficits as far as the eye can see, giving up the longtime Republican goal of a balanced budget to champion a spending plan replete with cash for a host of military programs and some domestic ones the president's supporters might admire.

The budget calls for about $716 billion in annual defense spending, more than $100 billion above the level Trump requested last year. Add in the tax cuts Republicans pushed through in December and the extra spending Congress approved just last week, and the result is a flood of red ink projected to send the national debt ever higher.

Trump's budget anticipates deficits throughout the next 10 years even if Congress were to approve some $3 trillion in cuts over that same time period that he's proposing for a wide range of federal programs. Both parties already rejected most of those cuts last year and have shown little interest in pursuing them.

The deficits persist even though the White House is forecasting extremely optimistic levels of economic growth. If growth falls short of those projections _ most economists think it will _ deficits would be higher still.

As a result, the budget marks something of a milestone _ the Trump administration's abandonment of the quest for budget balance that the Republican Party has claimed as a guiding light for years, at least rhetorically.

In reality, deficits have often soared under Republican presidents as the party has put cutting taxes ahead of balancing budgets on its list of priorities. In the past, however, Republican administrations have taken pains to at least come up with a budget that would balance on paper.

The budget unveiling led off with the administration's infrastructure plan, released with a statement from the president promising to build gleaming new roads, bridges and highways "all across our land."

Despite the bold promise, the plan involves a relatively small amount of new federal spending _ $200 billion offset, at least partially, by cuts to other programs. The administration claims the new money would spur some $1.5 trillion in infrastructure investments from state, local and private sources, but that would depend to a large degree on the willingness of local and state officials to raise taxes for transportation projects.

"Washington no longer will be a roadblock to progress," Trump told a group of state and local officials gathered at the White House.

Progress, as laid out in the budget, means building and spending on projects important to Trump's core supporters. The president proposes investment in popular causes including fighting the opioid epidemic and bolstering medical care for veterans.

He is also asking for $1.6 billion to build 65 miles of border wall in the Rio Grande Valley in south Texas, just one installment of the larger border wall promise that helped propel him to the Oval Office. He also proposed pouring more money into immigration enforcement.

But Trump's plan also defines progress as cutting programs that many of his voters don't like, including climate-change research at the Environmental Protection Agency and programs under the Affordable Care Act, also known as Obamacare.

He also once again is proposing to eliminate federal money for a number of longtime conservative targets, including the National Endowment for the Arts, the National Endowment for the Humanities and the Corporation for Public Broadcasting. Congress brushed aside those ideas last year.

His budget would slash almost $700 billion in federal health care spending that helps low- and moderate-income Americans who rely on insurance marketplaces created by the 2010 health care law.

As Republicans proposed last year, the plan would replace much existing health care spending with grants to states, allowing each one to craft its own health program. Similar proposals last year failed in the Senate, and Senate Majority Leader Mitch McConnell, R-Ky., has indicated that the chamber won't consider another run at Obamacare this year.

The spending blueprint also outlines nearly $1.5 trillion in cuts over the next decade to Medicaid, the government health plan for the poor _ another proposal that was rejected in Congress last year.

The administration said the sweeping reductions reflect a goal to cut regulation and "empower patients and doctors." Independent studies, as well as evaluations by the nonpartisan Congressional Budget Office, however, have projected that cuts of that magnitude would leave tens of millions of Americans without health coverage.

One illustration of the gap between the budget and congressional reality: Last week, as administration officials were putting the final touches on their spending plan, lawmakers reached a bipartisan budget deal that included an agreement to raise spending on both military and domestic programs over the next two years. Congress is highly unlikely to throw out its own decisions in favor of embracing those of the president.

Trump's budget director, Mick Mulvaney, acknowledged as much in the letter he sent to House Speaker Paul Ryan, R-Wis., transmitting the budget Monday. The administration doesn't believe the new spending decisions "comport with its vision" for the role and size of the government, Mulvaney wrote.

Ryan was circumspect.

"This budget lays out a thoughtful, detailed and responsible blueprint for achieving our shared agenda," he said Monday.

The unlikely cuts are just part of what makes Monday's budget partially fiction. The spending plan also assumes that the country's economic growth will surge to greater than 3 percent this year and stay above that level for several years to come _ a projection most economists think is optimistic. The CBO estimates that the gross domestic product will expand at somewhere around 2 percent a year over the coming years.

Because government revenues rise with economic growth, the deficit will be even higher than the budget acknowledges if the administration's rosy forecast proves inaccurate.

"The country is facing a massive fiscal challenge, and the president's budget doesn't own up to these realities and fails to call for a suite of credible policies that would help change course," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which over the years has chastised presidents of both parties for not balancing the budget.

(EDITORS: BEGIN OPTIONAL TRIM)

"The budget has too many gimmicks, exaggerated savings and rosy assumptions. Most troubling, it doesn't make the credible hard choices necessary to help bring the debt back to more manageable levels."

In recent years, Republicans preached that message loudly. GOP lawmakers, led in part by Mulvaney, fought President Barack Obama's spending plans through much of his presidency, insisting that the government should not spend more than it takes in.

Obama ran a large deficit in his first few years as the government spent heavily to stimulate the economy after the deep recession. The deficit then began a steady decline through most of the rest of Obama's tenure. The deficit began to increase again in the 2016 fiscal year and has climbed since. It is expected to top $1 trillion by next year.

That left Republicans who sounded the warning bell under a Democratic president in an awkward place on Monday.

(END OPTIONAL TRIM)

As Washington pored over the budget proposal, the president's fellow Republicans emphasized the rough-draft nature of the proposal, particularly in terms of its costs.

"It is just that, a first step," said Sen. Michael B. Enzi, R-Wyo., chair of the Senate Budget Committee.

"Balancing the budget should always be the goal," added Rep. Steve Womack, R-Ark., Enzi's counterpart in the House.

But Democrats bemoaned a world in which the administration would even suggest such deep cuts to social programs for the poor and aged _ especially so soon on the heels of generous tax cuts to rich people and corporations.

"While corporations reap billions in tax giveaways, older Americans who at least knew if they got sick when they got older they'd be taken care of, now have to worry," said Sen. Charles E. Schumer, D-N.Y., the chamber's minority leader.

House Minority Leader Nancy Pelosi, D-Calif., called the president's budget proposal a "brutal collection of broken promises and staggering cuts."

___

(c)2018 Los Angeles Times

Visit Los Angeles Times at www.latimes.com

Distributed by Tribune Content Agency, LLC.

_____

PHOTOS (for help with images, contact 312-222-4194): TRUMP-BUDGET

GRAPHIC (for help with images, contact 312-222-4194): 20180212 Budget