President Trump’s budget proposal has now been released, and it’s a mixed bag: some useful and necessary spending cuts; some useful and necessary spending increases; no attempt to restructure entitlements; some wishful thinking on economic growth. So, here’s a brief summary of the good and the bad of a budget that will never be passed, but helps spell out the administration’s priorities.
1. It Doesn’t Touch Entitlements. As The Wall Street Journal points out this morning, Trump’s budget doesn’t touch Social Security spending or Medicare. That’s in line with Trump’s promises during the campaign, but it also means that all other cuts will never achieve a balanced budget. Social Security and Medicare spending now represent nearly half the budget. The Journal states:
Mr. Trump is imitating Democrats in ducking Social Security and Medicare, which means that everything else the government does has to fight for what’s left. Those two programs plus interest on the debt remove about $1.9 trillion from political debate in the $4.1 trillion spending outline for fiscal 2018. Mr. Trump wants to increase defense spending to more than $600 billion, so that’s $1.6 trillion left for everything from education to veterans to Medicaid to Amtrak.
2. It Relies On Wishful Thinking To Balance The Budget. Trump says he’ll balance the budget; the chief way he wishes to do that is to cut taxes, then project 3 percent GDP growth every year beginning in 2021. While the Trump administration maintains that this should be doable, here’s the fact: we haven’t had annual GDP growth that high in back-to-back years since 2004-2005, and not in four consecutive years since 1997-2000.
3. It Cuts Discretionary Spending On Entitlements. The budget proposes a restructuring of Medicaid and Obamacare, and states that it will realize savings there – it includes the passage of the American Health Care Act as a given, saving $880 billion over the next decade, and then suggests that $616 billion will be saved via competition in health care spending – although the evidence that health care savings will be realized is relatively scanty. But on the good side of the ledger, Trump’s budget would allow states to add work requirements to entitlement programs and bar funding to illegal immigrants through federal tax credits.
4. It Cuts Useless Programs. The budget cuts Head Start, the National Endowment for the Arts, student loan programs, the Corporation for Public Broadcasting, the Institute of Museum and Library Services, and funding for crop insurance, among other programs.
5. It Cuts Some Useful Programs. The budget includes a massive 29 percent cut to the State Department budget, which could put security of our embassies abroad at risk. It also cuts the Voice of America’s Turkish-language broadcasting, as well as VOA broadcasting into Afghanistan and Iran. As Lachlan Markay writes, “Trump’s budget would boost U.S. military funding, but require deep cuts in other areas that advance U.S. geopolitical interests through diplomacy and soft power. National security experts say BBG and its component broadcasters, most notably VOA, are not just integral to the projection of U.S. interests and to countering adversarial propaganda, but are tremendously cost-effective.” Many Republicans are also bucking at proposed cuts to the National Institutes of Health.
6. It Increases Military Spending, But Not Enough. As Hugh Hewitt tweets out, the increase in defense spending in the budget does not include enough money to fund Trump’s proposed 350-ship Navy – in fact, the only ships in the 2018 proposed budget are a $1.8 billion Aegis destroyer, and a $550 million Littoral Combat Ship. The budget includes no new programs or initiatives, although it increases defense spending by 10 percent. The budget includes increased funding for active-duty troops, but doesn’t raise the cap from Obama’s spending on weapons procurement. As Senator John McCain (R-AZ) said, “This funding level represents are mere 3 percent increase over President Obama’s budget projection for the coming year.”
7. It Includes Serious Tax Cuts. The budget cuts corporate taxes as well as individual income taxes, and gets rid of estate taxes as well. To maintain government intake of tax dollars, the Trump administration says loopholes will be closed, but does not specify which loopholes. Critics of the budget say that Trump is counting the $2.1 trillion in growth supposedly achieved by the tax cuts twice – once, to fill the gap created by the tax cuts in federal revenue intake, and again, to project bigger growth.
8. It Includes Ivanka’s Budget Priority and Infrastrucutre Spending. The budget includes $25 billion for the next ten years for a mandatory paid leave program. The budget also includes a slated $200 billion to spur $1 trillion for “investment” in infrastructure.
9. It Doesn’t Really Include Trump’s Budget Priority. While the bill includes $1.6 billion for funding the border wall, it doesn’t include the $2.6 billion originally stated by the Trump administration as its goal. Office of Management and Budget Communications Director John Czwartacki explained, “Trump did not get all of the money that he wanted for the wall if you add up the 2017 and 2018 requests.”
Few of these cuts are actually real cuts -- many of them are reductions in the rate of increase. Overall, the budget will still be bigger in ten years under Trump's plan than it is now. But here’s the bottom line: you can’t restrict cuts to the stuff people like unless you’re willing to cut other stuff people like. And Trump, like most other politicians, isn’t willing to touch entitlements. When Democrats like Hillary Clinton say that Trump’s budget demonstrate an “unimaginable level of cruelty,” they’re lying: it’s cruelty to expect the next generation to pay the bills for this one, all because nobody has the political courage to make cuts that need to be made to federal spending.