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Trump budget cuts discretionary spending to lower the deficit

The military and veterans would see a boost in spending under the blueprint

Photo (c) MarianVejcik - Getty Images
Heading into an election year, President Trump has proposed a $4.8 trillion budget plan that increases spending for the military and veterans but cuts social safety net programs.

It’s not clear what the final budget will look like since the proposal is generally a starting point for talks. Democrats immediately pronounced the proposal dead on arrival.

The White House says its tough spending decisions are designed to reduce the deficit; White House officials have proposed cuts to housing, environmental programs, and other programs favored by Democrats. The proposal also includes a reduced amount of funding for a wall along the U.S. southern border with Mexico.

In a briefing with reporters, Russ Vought, acting director of the Office of Management and Budget, said the administration would keep proposing the same kinds of budgets until “at some point, Congress will have some sense of fiscal sanity and join us in trying to tackle our debt and deficits.”

Cuts in Medicare spending

Under the budget proposal, the government would cut Medicare spending, relying on reductions in drug costs and tightening eligibility requirements for Social Security’s disability program.

The plan signals a departure from the administration’s previous stance in dealing with Democrats in Congress. In the most recent budget, Trump agreed to a spending program that increased spending on defense but also poured more federal money into domestic programs favored by Democrats, increasing the deficit.

“This budget plan completely reverses that,” Rep. John Yarmouth (D-Ky.) told CNBC.

Senate Budget Committee Chairman Mike Enzi (R-Wyo.) says he’s not even going to hold hearings on the president’s budget proposal because Congress will write its own budget.

“Congress doesn't pay attention to the president's budget exercise,” Enzi said on the Senate floor. “I don't know why we put him through that." 


Any administration proposes spending under a best-case scenario. In the latest proposal, the White House projects the deficit to shrink by $4.6 trillion over 10 years and assumes the economy will grow at a consistent rate of 3 percent.

But that projection may be optimistic. The Congressional Budget Office (CBO) expects the economy to grow at 2.2 percent in the current fiscal year and may not reach that level in the years ahead. For 2019 the U.S. economy grew by 2.3 percent.

To get the federal budget deficit under control, the spending blueprint proposes cutting spending by $4.4 trillion over 10 years. The White House says that would cut the deficit by $4.6 trillion.

Deficits have grown over each of the last three years, and the national debt has now exceeded $22 trillion.

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