President’s Budget (released Feb. 12, 2018):
Dangerous Debt Increases:
- President’s budget policies prioritize the recent massive tax cuts and defense increases over stabilizing deficits — which are increasingly dangerous and unsustainable, with baseline deficits nearing $1 trillion in FY 2019 and growing thereafter, accumulated federal debt reaching 101% of GDP within a decade, and accompanying interest payments exceeding $850 billion per year.
- The rapid and dangerous growth of interest payments will increasingly crowd out the nation’s ability to invest in: our people’s education, training, and health; infrastructure to keep the nation competitive; national defense and law enforcement; disaster response and rebuilding; and vital programs that protect elderly, children, and disabled Americans.
- Last year, CBO projected that by 2050, interest payments would equal Social Security — and that was estimated prior to the recent tax cuts and defense increases.
- The largest benefits of the $1.5 trillion December tax cuts went to wealthy individuals and large corporations. JCT Analysis • TPC Analysis
More Defense Increases and Tax Cuts – Worsening the Debt:
- $810 Billion Defense Increase: Proposes to make the BBA’s defense increases permanent.
- $600 Billion Tax Cut: Extends the recent tax cuts (individual and estate), at a cost of $600 billion.
Big Cuts to Health, Education and Low-Income Programs (10-year numbers):
- $1.4 trillion cut in total Medicaid cuts resulting from repeal of the Affordable Care Act Medicaid expansion and other changes, impacting millions of low-income children, seniors, and people with disabilities.
- $265 billion cut to Medicare payments, mostly affecting hospitals and post-acute care facilities serving millions of America’s seniors and people with disabilities.
- $203 billion cut in Federal student loans programs.
- $215 billion cut in SNAP (Food Stamps) which protects 44 million people from food insecurity and hunger.
- $75 billion cut from extending the annual “sequestration” of Medicare and other mandatory programs.
- $72 billion cut in disability programs.
- $68 billion cut to Federal employee retirement.
- $58 billion cut to farm, agriculture, and food safety programs.
- $50 billion cut from reducing the Temporary Assistance to Needy Families (TANF) block grant and eliminating the Social Services Block Grant.
- Eliminates the Low Income Home Energy Assistance Program (LIHEAP).
Anemic/Misleading Proposal on Infrastructure:
- Ensuring modern and efficient interstate commerce to keep the U.S. economy integrated and economically competitive is a federal responsibility under the Constitution. However, the President’s Budget requests only $21 billion for infrastructure in FY 2019, at a time when ASCE estimates $2 trillion is required to address U.S. infrastructure rated “at strong risk of failure” and “mediocre.”
- Misleading: This anemic request is puffed up as the first installment of a $199 billion 10-year investment that will leverage $1.5 trillion together with State, local, and private investments–ignoring the reality that State and local governments are financially stressed, and highways, bridges, transit, airports, seaports, and waterways are public — not private sector — responsibilities.
- $122 billion cut in the highway program…. There are no new revenues to fund this meager investment — the spending would be taken from other domestic programs including transportation, with a $122 billion cut in highway programs after the expiration of the current highway bill.
One-Third Cut to Environmental Protection:
- Proposes a 34 percent decrease in funding for EPA including elimination of Climate Change Research and Partnership Programs — continuing the rejection of broadly accepted climate science.
Violates Last Week’s Bipartisan Budget Agreement on Domestic Spending:
- Domestic spending in 2019 funded at $57 billion below agreement: While fully funding defense levels, the budget renounces last week’s spending caps deal for funding of non-defense discretionary programs — the part of the budget that funds transportation and economic development; healthcare and health research; veterans healthcare; education and training; income security; science, environment, and energy; law enforcement; and diplomacy and international affairs.
- 42 percent cut in domestic discretionary spending by 2028: After 2019, the budget calls for progressively larger cuts in domestic spending (2% per year and no inflation adjustment), culminating in a funding level in 2028 that is 33 percent below the BBA level for this year and 42 percent after factoring in inflation.
- The National League of Cities released a statement: “Rather than honor Congress’ bipartisan funding agreement, the White House has only offered a roadmap for disinvestment and disengagement with cities and local governments.”
Over $2 Trillion in Budget Gimmicks to make Long-Term Deficits Appear Smaller:
- Budget assumes savings of $813 billion due to economic growth, which presumes higher than average growth (3% per year) and no economic downturn for 10 years — despite Administration policies resulting in slower rates of work force growth by cutting immigration.
- Assumes savings of $720 billion (including interest savings) from phase-out of the off-budget war fund (“overseas contingency operations”), which is unrealistic given the current state of ongoing conflicts.
- Budget ignores increasingly extreme weather patterns and assumes spending $174 billion less in emergency and disaster funding.
- Assumes $151 billion in savings from reducing unspecified improper payments.
- These gimmicks obfuscate the seriousness of the rapidly escalating debt in the U.S. that will reach 100% of GDP by 2028 under CBO’s nonpartisan baseline estimates.
Analyses/Statements on the President’s Budget: