Trump budget boosts military and border wall, targets social programs

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WASHINGTON (Reuters) – President Donald Trump on Monday called for spending more money on the military and a U.S.-Mexico border wall while overhauling social programs for the poor in a budget plan that sets the stage for his next fight with the U.S. Congress.

The Republican president’s $4.7 trillion budget was immediately panned by Capitol Hill Democrats, who blocked his push for a border wall during a standoff last year that led to a five-week partial shutdown of the federal government.

Like past presidential budget proposals, Trump’s plan was highly unlikely to become law, especially with Democrats in control of the House of Representatives. But it does serve as an early manifesto of his 2020 re-election campaign.

“President Trump has somehow managed to produce a budget request even more untethered from reality than his past two,” said Democratic Representative Nita Lowey, chairwoman of the House Appropriations Committee.

Democratic Senator Patrick Leahy, chairman of the Senate Appropriations Committee, said in a statement that Trump’s plan “is not worth the paper it is printed on.”

This year, the stakes for a deal are higher than in past years. An Oct. 1 deadline to keep the government running coincides with a deadline to lift the debt limit. Without an increase in the limit, the U.S. government would risk a default, which could shock the world economy.

Trump’s budget includes politically volatile proposals for overhauling Medicare, Medicaid and other costly social programs that form the American social safety net that helps the poor and underprivileged.
It asks for $8.6 billion to build a wall on the border with Mexico. That figure is more than six times what Congress gave Trump for border projects in each of the past two fiscal years, and 6 percent more than he has corralled by invoking emergency powers this year after he failed to get the money he wanted.

The spending plan makes no immediate progress on reducing the federal deficit or the national debt.

A senior administration official told reporters the budget would cut foreign aid by $13 billion.

The proposal also cuts federal subsidies to farmers; adds a new user fee on e-cigarettes; and ends a tax credit for electric car purchases.

Trump also calls for defense spending to rise more than 4 percent to $750 billion, using the emergency Overseas Contingency Operations (OCO) account – derided by conservatives as a slush fund – to skirt spending caps set out in a 2011 fiscal restraint law.

Non-defense spending was held below those caps, thanks to steep proposed funding cuts to the State Department (23 percent) and Environmental Protection Agency (31 percent), among others.

Even with the cuts, which the White House said would add up to $2.7 trillion in savings over a decade, the budget office said the Trump plan would not balance until 2034, exceeding the traditional 10-year outlook.

Tax cuts have been a priority for the Republican White House and Congress in the past two years, rather than deficit reduction. The deficit ran to $900 billion in 2019 and the national debt has ballooned to $22 trillion.

The Committee for a Responsible Budget said Trump’s budget would add $10.5 trillion to the debt over a decade, and criticized the White House for what it called a “fantasy assumption” of 3 percent economic growth over that timeframe – higher than the 2 percent average used by independent forecasters.
Exclusive: Trump to ask for $8.6B for wall

Unless the White House and Congress reach an agreement, the automatic spending caps from the 2011 law will kick in on Oct. 1, adding another level of urgency to the fall deadlines.

The White House wants to shake up the practice of pairing increases in defense spending with a corresponding increase in non-defense spending, a method that has been used to secure contentious funding deals in the past.

“We think we need to break that paradigm. We don’t think that that paradigm allows us to be able to get our fiscal house in order,” Russell Vought, Trump’s acting budget director, told reporters.

Reporting by Roberta Rampton and Ginger Gibson; Additional reporting by Mike Stone, Susan Cornwell and Patricia Zengerle; Editing by Kevin Drawbaugh, Peter Cooney and Bill Trott

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