Trump Budget Outline Calls for Massive Shift in Spending Priorities

The Trump Administration released a budget outline Thursday morning, addressing the 30% of the budget that is appropriated annually by Congress (i.e. defense and non-defense discretionary spending).  Proposals on entitlement programs and tax reform are expected to be released in May.   Link to Trump Administration Budget Outline: titled “America First: A Budget Blueprint to Make America Great Again.”  Link to Press Briefing by OMB Director Mick Mulvaney,   Sign-up above or click here to receive FedWeb blogs as more information becomes available.  The funding levels in today’s release are the President’s requested funding. Congress writes the appropriations bills  (following adoption of a Budget Resolution) and can accept, ignore, or change the requested funding for each  program. Appropriations bills effectively require 60 votes in the Senate, requiring bipartisan agreement. 

Most striking about the Administration’s budget plan are: (1) the decision to fund massive increases in defense spending through massive cuts in domestic and other non-defense spending;  (2) the reduction in foreign aid and development assistance (sometimes called “soft power”) in favor of defense spending (“hard power”); (3) the heavy emphasis on eliminating ineffective programs in the domestic budget but the absence of similar scrutiny on the defense side;  (4) scaling back federal support for health research, environmental protection, job training, education, rural programs, low-income energy and housing assistance; (5) no indication of how the infrastructure initiative or the border wall will be financed without increasing the debt;  and (6) elimination of numerous programs with small budgets but high-impact results including Appalachian Regional Commission; AmeriCorps; the Corporation for Public Broadcasting; the Legal Services Corporation; the Overseas Private Investment Corporation; and the United States Interagency Council on Homelessness.

[For nonpartisan background on discretionary spending programs, click here for defense programs and click here for non-defense programs.]

Defense Dept. would increase 10%, moving $54 billion from domestic and other non-defense programs into defense spending.  The proposal cites “the depletion of our military,” but avoids any analysis of current commitments and capabilities. Areas cited for increases are readiness, munitions, personnel, maintenance and modernization, cyber vulnerabilities, and degraded facilities.  Advocates for increasing defense spending typically point to a general downward trend in defense expenditures as a percent of the economy: currently 3.3% of GDP (Gross Domestic Product) compared to 4.7% in 2010, 4.5% in 2011, 4.2% in 2012, 3.8% in 2013, and 3.5% in 2014.  Opponents of defense increases typically point out that in dollar terms, the U.S. spends more than one-third of global defense spending and current U.S. defense spending exceeds the combined expenditures of the next seven countries: China, Russia, Saudi Arabia, France, UK, India, and Germany.  See FedWeb’s Defense spending page.

Agriculture Dept. would be cut 20.7%, $4.7 billion: cutting funding for USDA Service Centers, Rural Business and Cooperative Service, international food aid, the water and wastewater loan and grant program, and the Forest Service.

Commerce Dept. would be cut 15.7%, $1.5 billion: eliminating programs such as Rural Utility Service grants; the Minority Business Development Agency; the Manufacturing Extension Partnership; and coastal and marine management.

Education Dept. would be cut 13.5%, $9.2 billion: increases funds for charter schools and private school choice programs; freezes funds for Pell grants and students with disabilities; cuts funds for work-study; and eliminates funding for before- and after-school programs and Impact Aid to States.

Energy Department funding would be cut 17.9%, $3.1 billion, for non-nuclear programs (renewable energy, energy efficiency, climate change etc.), while increasing funding for nuclear weapons 11.3%, $1.4 billion. 

Environmental Protection Agency would be cut 31.4%, $2.6 billion: eliminating climate change and energy efficiency programs, and cutting back cleanup of hazardous waste.

Health and Human Services Dept. would be cut 17.9%, $15.1 billion: including massive cuts of $5.8 billion in NIH medical research; a shift in some Centers for Disease Control funding into block grants to States; cuts in mental health funding; and eliminating Low Income Home Energy Assistance (LIHEAP) and Community Services Block Grants.

Homeland Security Dept. would be increased 6.8%, $2.8 billion: including increases to fund the border wall, to hire additional Border Patrol Agents and Immigration & Customs Enforcement personnel, and to increase detention, transportation and removal of illegal immigrants.  Recommends “restructuring selected user fees for the Transportation Security Administration (TSA)…to ensure that the cost of Government services is not subsidized by taxpayers who do not directly benefit from those programs.”

Housing and Urban Development Dept. would be cut 13.2%, 6.2 billion: including cuts in low-income housing and elimination of Community Development Block Grants and the HOME Investment Partnerships Program.

Interior Dept. would be cut 11.7%, $1.5 billion: increases funding for fossil fuel production on public lands; provides no indication of funding levels for National Parks; and reduces funding for Indian tribes.

Justice Dept. would be cut 3.8 percent, $1.1 billion: while increasing funding for counter-terrorism, immigration, and border enforcement.

Labor Dept. would be cut 20.7%, $2.5 billion: reducing funding for job training grants, Job Corps centers, disability employment grans, and Occupational Safety and Health Administration training grants.

NASA would be cut 0.8%, $0.2 billion: reducing funding for Earth sciences.

Small Business Administration would be cut 5%, $43 million.

State Dept. and USAID (foreign aid) would be cut 28%, $10.1 billion (and Treasury International programs would be cut 35%, $803 million) including major cuts in foreign aid, elimination of the Global Climate Change Initiative, cuts in support for UN peacekeeping, cuts in multilateral development banks and elimination of the Emergency Refugee and Migration Assistance program.

Transportation Dept. would be cut 13%, $2.4 billion: privatizing air traffic control, cutting Amtrak, cutting public transit spending, and eliminating funding for Essential Air Service for rural areas.

Treasury Dept. would be cut 4.1%, $519 million: including IRS cuts of $239 million and eliminating the Community Development Financial Institutions (CDFI) Fund grants.

Veterans Affairs Dept. would be increased 6%, $4.4 billion to cover increases in VA health care (which is a discretionary program, unlike veterans compensation and pensions which are entitlements).

Federal Workforce:  Administration promises to submit to Congress a plan to “reduce the size of the Federal government.”   According to OPM data the federal civilian workforce is the smallest it has been since 1966.