February 12, 2018 / 6:11 AM / 5 months ago

Trump budget seeks cuts to domestic programs, Medicare, favors military and wall

WASHINGTON (Reuters) - President Donald Trump proposed a budget on Monday that calls for cuts in domestic spending and social programs such as Medicare and seeks a sharp increase in military spending and funding for a wall on the Mexican border.

While running for president in 2016, Trump pledged to leave popular benefit programs such as Medicare and Social Security untouched, but his new budget proposal would reduce Medicare spending by $236 billion over the next 10 years.

The White House argued, however, that the reduced spending would come through reforms to the government health insurance program for the elderly, not benefit cuts.

There is little chance of those cuts becoming real, as presidential budgets are rarely enacted by the U.S. Congress, which controls federal purse strings. Instead, the budget allows the White House to lay out its priorities for the year.

Still, the proposed cuts drew a rebuke from the top Democrat on the House of Representatives Budget Committee, John Yarmuth.

“These cuts to critical federal investments are so extreme they can only reflect a disdain for working families and a total lack of vision for a stronger society,” Yarmuth said in a statement.

Beyond social programs, the plan calls for deep cuts in non-military spending that the White House said would lower the federal budget deficit by more than $3 trillion over 10 years.

It calls for spending $57 billion less in fiscal year 2019 than mandated in a two-year budget deal passed last week by Congress that raised spending limits on both military and domestic programs by $300 billion.

That bipartisan agreement means Congress has already locked in its own spending priorities and that Trump’s proposals are unlikely to be taken on.

The Trump administration says, however, that Congress need not spend all of the money called for under the deal, particularly with regard to domestic spending.

“The message is really simple: You don’t have to spend it,” said Mick Mulvaney, Trump’s budget director.

Trump’s budget proposal forecasts annual economic growth of at least 3 percent over the next three years, an aggressive target that is crucial to help cover the cost of $1.5 trillion in tax cuts passed by the Republican-controlled Congress in December.

Even given those optimistic projections, the swelling of the federal debt following the tax bill and the two-year budget agreement means that Trump’s proposal notably abandons the objective of eliminating the federal budget deficit after 10 years, a long-standing goal of fiscal conservatives.

Copies of the President Trump's FY 2019 budget proposal are delivered to the U.S. House Budget Committee offices on Capitol Hill in Washington, U.S. February 12, 2018. REUTERS/Jonathan Ernst

MILITARY, INFRASTRUCTURE

Trump’s $4.4 trillion budget proposal provides for $716 billion in spending on military programs and for maintaining the U.S. nuclear arsenal,

It also includes $200 billion for rebuilding the nation’s infrastructure, and an outlay of $23 billion for border security - most of it for the building of a wall on the border with Mexico to stop illegal immigration.

The wall is a key item for Trump’s political base of supporters but is opposed by Democrats. The issue has become a sticking point in talks to keep alive a federal program to spare from deportation the “Dreamers” - people brought to the country illegally as children.

Trump’s budget calls for $571 million in additional funding to hire 2,000 more Immigration and Customs Enforcement officers and agents. It also requests funding for more judges and attorneys to handle cases of illegal immigration.

In keeping with another Trump campaign promise, the budget provides for $200 billion in federal funds intended to spur $1.5 trillion in infrastructure investments with state, local and private partners over the next 10 years - an ambitious program that will have to be approved by Congress.

The budget also seeks some $13 billion in new funding over the next two years to combat the opioid epidemic.

Slideshow (5 Images)

The proposal increases U.S. contributions to the United Nations, an organization that Trump has repeatedly criticized, by 4.5 percent. The budget explains the increase as supporting American interests, including “drug control, crime and terrorism prevention, and trade promotion.”

Reporting by Ginger Gibson and James Oliphant; Additional reporting by David Morgan and Katanga Johnson; Editing by Alistair Bell and Peter Cooney

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