In the widely anticipated budget proposal to be released by President Trump on Thursday, the White House will call for spending cuts of 28% for the State Department and 31% for the Environmental Protection Agency, the New York Times reported on Wednesday, citing congressional staff who are familiar with the plan. The budget plan for fiscal 2018 will also propose a big reduction in the State Department's Food for Peace program and elimination of a Transportation Department program that subsidizes flights to rural U.S. airports.
In addition to the above cuts, Trump’s team is expected to propose a wide array of cuts to public education, to transportation programs like Amtrak and to the Department of Housing and Urban Development, including the complete elimination of the $3 billion Community Development Block Grant program, which funds popular programs like Meals on Wheels, housing assistance and other community assistance efforts.
The E.P.A. is, arguably, the hardest-hit agency under Mr. Trump’s budget proposal: He wants to cut spending by nearly a third — $2.6 billion from its current level of $8.2 billion, according to a person who had been briefed on the proposal but was not authorized to speak publicly about it. That would take the budget down to about $5.7 billion, its lowest level in 40 years, adjusted for inflation. In an initial draft, the White House had proposed cutting about $2 billion from the agency’s budget, taking it down to just over $6 billion, according to an aide familiar with the plan.
Offsetting these cuts, the budget outline would funnel $54 billion in additional funding into defense programs, boost immigration enforcement and significantly reduce the nondefense federal work force to further the “deconstruction of the administrative state,” in the words of Mr. Trump’s chief strategist, Stephen K. Bannon.
According to the NYT, "the budget outline, to be unveiled on Thursday, is more of a broad political statement than a detailed plan for spending and taxation. It represents Mr. Trump’s first real effort to translate his bold but vague campaign themes into the minutiae of governance." The plan to be released at 7 a.m. tomorrow is a “skinny budget,” a pared-down first draft of the line-by-line appropriations request submitted by first-term administrations during their first few months. A broader budget will be released later in the spring that will include Mr. Trump’s proposals for taxation as well as the bulk of government spending — Social Security, Medicare, Medicaid and other entitlement programs.
Still, as with many of Trump's other bold proposals, major elements of the plan have already been declared dead on arrival by the Republican leadership in Congress, and much of the fiscal fine print will be filled in by Capitol Hill lawmakers and their aides over the next month.
House appropriations subcommittees began reviewing the plan late Wednesday. Among the cuts: drastic reductions in the 60-year-old State Department Food for Peace Program, which sends food to poor countries hit by war or natural disasters, and the elimination of the Department of Transportation’s Essential Air Service program, which subsidizes flights to rural airports.
The proposed State Department cuts, which leaked this month, have already created a backlash among some Capitol Hill Republicans. Senator Mitch McConnell of Kentucky, the majority leader, has already said Senate Republicans will not agree to deep cuts to the $50 billion budget for the State Department and United States Agency for International Development initially proposed by the Trump administration’s Office of Management and Budget.
“This is definitely dead on arrival,” Senator Lindsey Graham, a South Carolina Republican who serves on the Senate Foreign Relations Committee, told reporters at the Capitol late last month of the proposed cuts to the diplomatic corps and foreign aid.
And since it looks improbable that Trump will get most - or even a material amount - of his proposed spending cuts, it will only make Trump's proposed tax cuts that much more problematic, unless Congressional conservatives suddenly become believes in debt-funded everything, in which case it may all boil down to Janet Yellen again, and the Fed's monetization of what suddenly appears to be a gaping budget deficit, which however at a time of rising rates and economic "animal spirits", looks very unlikely absent a dramatic deterioration in the US economy.