Here's Trump FY20 budget. It's about to get shredded

03/12/2019 08:08 |

Here's Trump FY20 budget. It's about to get shredded

President Donald Trump's proposed $4.7 trillion budget is based on a forecast that the economy will grow by at least 3 percent a year through his presidency. Some economists, though, say the bump from the tax cuts is waning, and they project slower growth in coming years.

Late last week, the White House proposed a "combination" plan that would included a limited national emergency with other sources of funding, but that was pronounced dead on arrival.

"In a time of $1 trillion deficits, we can no longer afford some of these activities", acting White House budget director Russell Vought told Morning Edition "Foreign aid does go down by about 23 percent". "We must protect future generations from Washington's habitual deficit spending". It requests $750 billion for national defense, or $34 billion above the funds enacted for FY19, while it cuts the nondefense side to $563 billion, a 9 percent drop from FY19.

In addition to the pay raise, the White House defense budget proposal asks for funding "for a full range of compensation programs, from monthly incentive pays to recently modernized retirement benefits". He also wants an additional $8.6 billion for the U.S. -Mexico border wall.

Trump would increase defense spending almost 5 percent in fiscal year 2020, which begins October 1.

The Trump administration warns that the largest threat to economic prosperity is the federal deficit, which is now at $22 trillion, and interest payments that would exceed defense spending by 2024 if nothing is done. Under the plan, military personnel will get their largest pay increase in a decade and the Pentagon will get 12 battle force ships and 110 fighter aircraft.

The spending plan calls for a cut of almost $1.5 trillion in Medicaid over 10 years and for $1.2 trillion to be added for a new "Market Based Health Care Grant" - that is, the block grants that would start in 2021.

"The budget also proposes that USDA responsibly and efficiently use taxpayer resources by making targeted reforms to duplicative programs and overly generous subsidy programs", the document said. "The simple truth is that the road to get our fiscal house in order isn't an easy one". To stay within the caps, it shifts a portion of the military spending, some $165 billion, to an overseas contingency fund, which some fiscal hawks will view as an accounting gimmick. Those funds aren't subject to the budget caps that Congress has had to overcome for almost a decade.

Democrats dismissed the move as a gimmick.

Ms. Lowey said the House, Senate and White House need to agree on another framework to increase the spending caps, though the administration said Democrats' insistence on equivalent increases for defense and domestic spending in past budget deals is a major part of Washington's fiscal problems.

"In the midst of a prolonged rural recession and crop damage from devastating weather events, we should be having a conversation about how to strengthen and improve crop insurance, not weaken the policies that so many of America's farmers rely on", a coalition of seven crop insurance groups said.

The White House Office of Management and Budget said the president's budget request seeks $2.7 trillion in cuts - "higher than any other administration in history". "And we are going to do it one way or the other". There's a 10 percent increase in spending on veterans and money to fight the opioid drug crisis.

Education Secretary Betsy DeVos on Monday sent a letter Congress indicating that she plans to clear the way for religious schools and organizations to be eligible for federal funding and grants.

According to the administration, the plan is provide "additional flexibility to states" and put Medicaid "on a path to fiscal stability by restructuring its financing and reducing waste". "On top of that, President Trump's budget attacks the Affordable Care Act, Medicare, and Medicaid, and makes extreme cuts to agriculture, education, workforce development, environmental protections, and health and human services, to name a few".

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