Trump's $4 Trillion Budget Proposal Unveiled: Here Are The Main Highlights

As previewed last night, President Donald Trump has proposed to Congress a $4 trillion-plus budget for next year that projects a $1 trillion or so federal deficit and in the biggest surprise leaked last night, and unlike the plan he released last year, never comes close to promising a balanced federal ledger even after 10 years. On, and that was before last week's $300 billion budget pact is added this year and next, showering both the Pentagon and domestic agencies with big increases. The spending spree, along with last year's tax cuts, has the deficit moving sharply higher, and spooking interest rates.

Ironically, the original plan was for Trump's new budget to slash domestic agencies even further than last year's proposal, but instead it will land in Congress three days after he signed a two-year spending agreement that wholly rewrites both last year's budget and the one to be released Monday. The 2019 budget was originally designed to double down on last year's proposals to slash foreign aid, the Environmental Protection Agency, home heating assistance and other nondefense programs funded by Congress each year.

Trump will again spare Social Security retirement benefits and Medicare as he promised during the 2016 campaign. And while his plan would reprise last year's attempt to scuttle the "Obamacare" health law and sharply cut back the Medicaid program for the elderly, poor and disabled, Trump's allies on Capitol Hill have signaled there's no interest in tackling hot-button health issues during an election year.

Here are some of the details:

While we await the full release, Bloomberg has noted that Trump’s FY19 budget proposal calls for $1.7t in cuts to mandatory spending and receipts and a 2% yearly reduction in non-defense discretionary budget after 2019.  As part of the mandatory spending, the budget projects $237 billion in savings from Medicare over 10 years.

More from Bloomberg:

The document says that the budget will propose cutting spending on Medicare, the health program for the elderly and disabled, by $237 billion but doesn’t specify other mandatory programs that would face reductions, a category that also includes Social Security, Medicaid, food stamps, welfare and agricultural subsidies.

The Medicare cut wouldn’t affect the program’s coverage or benefits, according to the document. The budget will also call for annual 2 percent cuts to non-defense domestic spending beginning “after 2019.’

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Trump will urge an increase in defense spending to $716 billion and a 2.6 percent pay raise for troops. He will request $18 billion to build a wall on the Mexican border, the summary indicates.

The White House also seeks $200 billion for the infrastructure proposal the administration plans to unveil alongside the fiscal year 2019 budget, as well as new regulatory cuts.

Or summarized:

  • Budget request calls for $716b for defense and includes a 2.6% pay raise for troops
  • $80b in IT and cyber- funding as well as $210m for a technology modernization fund
  • Nearly $17b in opioid-related spending in 2019, including $10b in new funding for HHS
  • Requests $18b for border wall construction


In a strange twist, the White House said in a statement without explanation "that its plan would cut the federal deficit by $3 trillion over 10 years and reduce debt as a percentage of gross domestic product."

Mick Mulvaney, the former tea party congressman who runs the White House budget office, said Sunday that Trump's new budget, if implemented, would tame the deficit over time, only it wasn't exactly clear how.

"The budget does bend the trajectory down, it does move us back towards balance. It does get us away from trillion-dollar deficits," Mulvaney said on "Fox News Sunday." "Just because this deal was signed does not mean the future is written in stone. We do have a chance still to change the trajectory. And that is what the budget will show tomorrow."

And the punchline: last year, Trump's budget projected a slight surplus after a decade, but critics said it relied on an enormous accounting gimmick — double counting a 10-year, $2 trillion surge in revenues from the economic benefits of "tax reform." Now that tax reform has passed, the math trick can't be used, and the Trump plan doesn't come close to balancing.

As a result, Trump's budget no longer even comes close to balancing over 10 years.

Meanwhile, critics say this year's Trump plan, which promises 3% growth, continuing low inflation, and low interest yields on U.S. Treasury bills despite a flood of new borrowing, underestimates the mounting cost of financing the government's $20 trillion-plus debt.

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Then again, none of the above matters: as Bloomberg points out, Trump's budget is unlikely to gain traction on Capitol Hill.

The full budget proposal is below (pdf link)

Comments

takeaction BaBaBouy Mon, 02/12/2018 - 10:54 Permalink

Spend baby spend.....I wish I could spend money I don't have with no intention of ever getting it paid off.  Imagine your credit cards.  You rack up $100K on them...then call them and say..."I can't pay this shit, I have to borrow more just to cover the interest, so can you raise my credit limit..?" 

.

.

ANSWER....Of course.

.

Oh...and wait till interest rates take a jump ....Oh boy....Popcorn please....

In reply to by BaBaBouy

Hugh_Jorgan ParkAveFlasher Mon, 02/12/2018 - 11:18 Permalink

I don't know why anyone is surprised. Trump is at best a Reagan Democrat by birth. Throw in delusions of grandeur and a dollop of narcissism and you MUST spend to try to win your spot on Mt. Rushmore or ???. Much needed fiscal conservatism is little more than a distant memory at this point, and you KNOW he isn't done spending big $$$$$.

I mean Tax and (over)Spend used to be bad enough. Now it's tax break and (wildly over)spend. As if the laws of economics can somehow be rewritten? If this mess holds together long enough, our great-great grand kids will still be cursing us for this burden. More likely they'll curse us for the new dark age we create when the collapse happens.

In reply to by ParkAveFlasher

pods Hugh_Jorgan Mon, 02/12/2018 - 11:36 Permalink

Yeah, this is nutso to even propose something like this.
And to boot not touching Medicare, which is going to bankrupt the country. Well, it was. Now general spending might help enough so Medicare doesn't take the fall for the destruction of the dollar and the USA.

This budget is basically saying "we're fucked, might as well go out with a bang."

pods

In reply to by Hugh_Jorgan

fx lloll Mon, 02/12/2018 - 13:09 Permalink

Yeah, cut 230 bn $ for healthcare of disabled people and elderly people. A good chunk of that will be borne by the veterans of the military. The very people that Trump so often promised in his election speeches to not forget anymore. Duh, I guess, that isn't the kind of "attention" and "care" they were signing up for when voting for the Donald? And then Trump throws ALL of that  "saved" (i.e. extracted) money at the already overbloated defense industry, for the MIC swamp to prosper more than ever before. Because that is what America needs most right now: moar nuclear bombs, moar drones, tanks, missiles, guns...

Make the MIC as great as never before!

 

Another one of those great wins, I guess. America already spends more on military and arms than all its current potential, future potential and current real enemies combined, by an order of magnitude, but that still isn't enough for the military-obsessed Trump, it seems. 

Add to that Trump's desire to do some large military parades and all of a sudden you realize what a small stupid, easy to impress and easy to distract, little boy he is, at his core.

What a disappointment, again.

yeah, I am by now  tired of those kind of  "wins", indeed....

In reply to by lloll

MoralsAreEssential pods Mon, 02/12/2018 - 12:42 Permalink

Your last sentence, exactly.  It DOES NOT MATTER.  The system will be reset in the next few years. According to Armstrong Economics, nations have defaulted on debt routinely throughout history.  Now the word "default" may not be used in our Brave New World, but the debt in the world can never be repaid.  How this all is reset will reveal TPTB "plan" for the Plebs.  We have nothing to say about it although we can have massive social unrest.  However, if TPTB had not cared about massive unrest in North America anyway, they would have probably gone with the Hitlery plan.  

In reply to by pods

pods 4johnny Mon, 02/12/2018 - 12:07 Permalink

Being that I have kids, it really angers me that the structural problems we have are not looked at, or even spoken of.  There is nobody in the media that is running a special about how dangerous it is to the survival of the nation that we have hundreds of trillions in unfunded outlays for Medicare and SS.

It is the worst kept secret in DC and nobody will ever say a thing about it?

The dollar or country is toast.

But since the bankers own the dollar, there have to be some large scale war to remove the mouths to feed so to speak.  And we also run around the world forcing dollars down the throats of every nation that wished to trade.

I flat out told my kids that the benefits that their grand parents have now will be gone by the time we grow old enough to use them. 

We are flat out fucked when it comes to the future.  So much so that I have changed my whole retirement plan.  Fuck the 401k. If there is not some passive streams of income for my wife and I when we get older we might as well eat a bullet. You cannot put enough away to live in retirement.  Just cannot happen when you square away the debt burden. Better to take the hit now and find some productive means of income that you can manage in your later years.  That is the only way you can protect yourself from inflation.

pods

In reply to by 4johnny

pods ThinkerNotEmoter Mon, 02/12/2018 - 12:20 Permalink

Some land is in the plans. Not sure about the farm.  Garden definitely.  Found a setup that works really well down here. Drip irrigation.  Had yields that amazed me. Ended up handing jewcumbers (sorry, they really were jewcumbers, an Israeli bred apple cucumber) to the neighbors walking their dogs down the street.  Crazy yields, and with top notch genetics still around, gardening gets fun.  By top notch I mean ample varieties of heirloom seeds.

pods

In reply to by ThinkerNotEmoter

FreeMoney Baron von Bud Mon, 02/12/2018 - 14:23 Permalink

Probably better to look at past collapsed societies, to see where and how the savers were bailed in to the debt failure.

Venezuela is showing us that merchants and producers have their assets nationalized for the public good quite early.  I suspect with the liberal mentality of rent control that the next step is to liberate property from landlords for "socially equitable redistribution."

It appears the best investments are in the precious metals, gold, silver, brass and lead.  Wont hurt to be able to filter your water and have some booze also.

In reply to by Baron von Bud

Faeriedust FreeMoney Mon, 02/12/2018 - 19:38 Permalink

When SHTF gold is mostly useless.  Read your WWII histories.  In countries under invasion and occupation, formerly wealthy people quickly spend out all they have just for food.  Everyone needs food, it's destroyed when used and has a limited shelf-life.  And in societies in collapse people tend to be too busy or situations too chaotic for agriculture to proceed as usual.  Conflict destroys crops in the field or stores in warehouses; broken transportation systems don't move goods to where they're needed.  Urban areas end up literally besieged or effectively cut off from supplies by system failures.  Oh, and in the next iteration, water shortages are likely to be pretty common, too.  You can only go two days without drinking water.

The best investment is an orchard at least ten miles away from major transport routes.  Once planted and mature, it requires minimal maintenance and produces food for humans and livestock on a regular schedule.  Ten miles is half a day's travel without gasoline; that makes it far enough away from the easy roads to escape most random pillage but close enough for deliberate trade. Of course land, too, can be confiscated.  But most modern governments aren't competent enough to do anything useful with it and so tend to leave that for last. 

In reply to by FreeMoney

MK ULTRA Alpha pods Mon, 02/12/2018 - 13:18 Permalink

I don't understand all this, The government made me give them extra money beyond my taxes to pay into an account that they told me was for my old age. Now after being rolled and rolled in national economic failure(robberies) after national economic failure, more and more of the people I know must depend on social security.

Now with Obama Youth viciously attacking every social sub set but themselves, old people are lied to, abused and forced out of the work force. And if you're a white male, there is even more shit dumped on you.

But now I read and read, even Stockman comes on here with the same destroy social security mantra and these fools on here cheer lead the mantra of killing social security.

The national debt is not $20 trillion, because a portion of it belongs to the government, $3 trillion of that debt is in social security and the dividends are used to pay social security. The plan is to do away with social security to steal some or all of the social security $3 trillion so the government doesn't have to pay.

Each working person at age of retirement gave at least 3 years of their work life to social security. Essential it's a good saving program for working poor. It only earns 1.5% so it's a good deal for the government to borrow social security money and now they don't want to pay it back.

Republicans have stated on Trump first day of his second term he will end social security. Another Republican is Paul Ryan who has worked hard to destroy social security.

Should Paul Ryan be shot to death if we lose or are robbed of our social security money we were forced to pay into? What do you say FBI, do you think Paul Ryan should be killed for robbing the people of this country?

The end of social security is a grand robbery. Will all the money we gave social security, not the corporate portion, but the money we put into social security, is that money going to be paid back to the people who were forced to give the social security our wages?

In reply to by pods