MUSCLE MONEY

The winners and losers in Donald Trump’s “America First” budget

Obsession
"America First"
Obsession
"America First"

Today we’ll get a first look at Donald Trump’s vision for the government.

“This is the America First budget,” White House budget director Mick Mulvaney told reporters previewing the release. “We wrote it using the president’s own words. We have an America First candidate, we have an America First budget.”

What does that actually mean?

From soft power to hard power

The biggest-ticket item in his 2018 budget (pdf) is a 10% increase—about $54 billion annually—in US defense funding. Along with increases in law-enforcement spending, it will be paid for by cuts to programs seen as inimical to Trump’s worldview, ranging from environmental protection and Amtrak to the Corporation for Public Broadcasting and Meals on Wheels, but—especially—by a 28% cut at the State Department. Mulvaney said this was not an attack on the department itself but rather on foreign aid.

“The president ran saying he would spend less money overseas and more money back home,” Mulvaney said. Yet he suggested that military aid to foreign countries, delivered by the Department of Defense, would not be cut.

“There’s no question this is a hard-power budget,” Mulvaney said. “It is not a soft-power budget…That was done intentionally. The president wants to send a message to our allies and our potential adversaries that this is a strong-power administration. You’ve seen money move from soft-power programs such as foreign aid into more hard power.”

Trump’s frequent campaign references to bombing ISIL and taking oil from Iraq suggest that this section of the budget indeed follows his own ideas. On top of the $54 billion increase, he will also ask Congress for $30 billion in contingency funding for military operations abroad.

Keeping promises

“If he said it on the campaign, it’s in the budget,” Mulvaney said. This isn’t true universally, as we’ll see, but it is true of a few key areas.

One obvious promise kept is cuts to the Environmental Protection Agency’s rules limiting pollution by large companies. The White House has put Scott Pruitt, a longtime critic of the agency, in charge of it, with a mandate to prune it back; it’s budget will be fall by 31%. “You can expect reductions at the EPA that don’t line up with the president’s view on things like climate change and alternative energies,” Mulvaney said.

Trump is also keeping his promises not to touch Medicare or Social Security. That’s a key reason why, despite his campaign-trail complaints about how much the US borrows, his budgets will not reduce the deficit or the national debt this year or next.

The White House is also asking for $1.5 billion to spend this year on a border wall with Mexico. Though it’s still not at all apparent how Trump will keep his promise to make Mexico pay for the wall, his administration evidently wants to get started on a project experts expect to cost between $21 billion and $30 billion,

What’s missing

Still, there are some glaring absences in this budget. One is that there isn’t even a placeholder for the $1 trillion in new infrastructure investment that Trump has promised to ask Congress for.

In fact, the budget plans major cuts to the Department of Housing and Urban Development (HUD), which funds some of those investments and would be intimately involved in Trump’s vague promises to invest in “inner cities.” Asked about this, Mulvaney said, without naming any, that “a lot” of HUD’s programs “simply don’t work,” and that details of replacements will be forthcoming later in this year. (Where have we heard that before?)

“You will see reductions, for example, in other agencies on infrastructure programs,” Mulvaney said. “People might say, ‘well, goodness gracious, that doesn’t line up [with] what the president said about a commitment to infrastructure. That was done intentionally…Why? We believe those programs to be less efficient than the infrastructure package that we are working on for later on this year. What we’ve effectively done is move money out of existing, inefficient programs and hold that money for what we expect to more efficient infrastructure programs later on.”

Yet in a budget that Mulvaney described as being perfectly offset between spending cuts and increases, it’s not clear if these savings will be available later in the year. Potential infrastructure spending may wind up tied to a tax holiday for multinational companies that bring home overseas profits. Funds raised during the holiday would then be used to guarantee loans to private companies investing in US infrastructure. Such a plan has been attractive to lawmakers from both parties in the past, but also raises concerns of corruption, crony capitalism and wasted funds.

Without more details on this plan, there is little to say other than this America First budget doesn’t invest much in America.

Dead on arrival?

Most presidential budgets are barely more than suggestions, but Trump’s low popularity and the lack of detail about his drastic shifts in spending mean that this document is more likely than usual to change before lawmakers approve it.

To enact the budget, Republicans who control the Senate hope to win the agreement of a few Senate Democrats and avoid a filibuster. That would mean reducing some of the harsh cuts to domestic spending, some of which even Republican lawmakers have already said they oppose. It may also require excising controversial items, like funding for the Mexican border wall, which Democratic Senate leader Chuck Schumer says would prompt a full-on legislative battle.

But even leading conservatives like Texas senator John Cornyn aren’t eager to buy Trump’s wall without details. “I prefer to see a plan first before we start appropriating money,” Cornyn told Politico. “We won’t just appropriate money and have the plan TBD. And I’ve got some questions.”

(Mulvaney doesn’t appear to have the answers: “We haven’t settled on construction types, we haven’t settled on where we are going to start, I think the funding provides for a couple of different pilot cases…different kinds of barriers in different kinds of places to try and find the most cost-efficient, the safest, and also the most effective border protections.”)

Combined with the shambolic progress of the American Health Care Act, which has become a political hot potato since Congressional analysts outlined that millions of people would lose health insurance, it’s hard to see the Trump White House forcing Congress to accept this spending plan without major alterations.

 


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