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Trump Slashes Safety Nets in Budget Request

The White House’s latest budget request includes sharp cuts to programs such as Medicaid and food stamps.

By Andrew Soergel, Senior Writer, Economics U.S. News & World Report —

President Donald Trump unveiled a proposal last week that, if approved in full, would lead to steep funding cuts to social assistance programs and slash projected long-term spending on Medicare and Social Security – items that the president has vowed to leave undisturbed by his administration’s budgetary chopping block.

The $4.8 trillion budget proposal boosts defense spending in the short term but slashes federal spending – with politically unrealistic cuts of more than 37% to the Department of Commerce, more than 26% to the Environmental Protection Agency and nearly 13% to the Department of Transportation.

And to help offset additional funding requests for White House priorities, such as NASA space exploration and border wall construction, the administration is also considering a series of cost-cutting and potentially benefit-limiting alterations to programs such as Medicaid and food stamps.

Revisions to welfare reform programs such as food stamps and the Temporary Assistance for Needy Families (TANF) program would shave nearly $300 billion from federal spending obligations by 2030, with another $76 billion dropped from federal disability programs.

“Less than a week after promising to protect families health care in his State of the Union address, the President is now brazenly inflicting savage multi-billion-dollar cuts to Medicare and Medicaid,” House Speaker Nancy Pelosi of California said in a statement Sunday.

Pelosi’s and fellow Democrats control of the House all but ensures Trump’s budget request is effectively dead on arrival on Capitol Hill. The proposed White House budget for fiscal 2021 also represents a marked reversal from a two-year budget deal Trump signed in August that lifted the federal debt ceiling through November’s presidential elections and into 2021.

“I’m glad the President’s budget aims to put debt on a downward path and proposes some important policy reforms to help achieve that goal,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement Monday. “But when you peel away the rosy growth assumptions, the assumed reversal of spending increases the President has already signed into law, and the exaggerated and unspecified savings, we are still left with a mountain of debt.”

The content of the budget document mirrors previous funding blueprints the Trump administration has produced in prior years. Steep budget cuts to the EPA and more modest hits to the departments of Education, Energy and Agriculture and the National Science Foundation have been staples of previous Trump budget proposals. That the proposal also slashed foreign aid support, likewise, was unsurprising.

But the inclusion of so-called entitlement program cuts is notable in that Trump has repeatedly vowed not to touch institutions such as Medicare and Social Security. Speaking to a group of governors hours before the White House budget proposal was publicly released, Trump said his administration is “not touching” Medicare or Social Security and is “not decreasing Medicaid.”

However, the White House’s budget proposal instead appears to position Medicaid funding directly on the chopping block. And although the document doesn’t ex-
plicitly call for cuts to Medicare or Social Security benefits, it projects the government would save more than $12.5 billion between 2021 and 2030 by improving Social Security’s “payment integrity.”

Addressing “fraud and abuse” in Medicare spending, likewise, would decrease government spending obligations by nearly $14 billion. Democrats, however, have said these efforts to target perceived waste could lead to benefit cuts for those who need them.

“By proposing severe cuts to Medicaid and Medicare, President Trump’s latest budget is simply a continuation of his war to rip away health care from millions of Americans, including people with pre-existing conditions,” Senate Minority Leader Chuck Schumer of New York said in a statement on Monday.

The proposed Medicaid and food stamp work requirements would advance policies long preferred by GOP lawmakers hoping to rein in federal spending obligations and social assistance programs.

Separately from Monday’s budget proposal, the Trump administration has also proposed enhancing federal oversight of state Medicaid funding strategies while potentially restricting access to low-income Americans. The administration also finalized a new rule in December that extends federal oversight of states seeking SNAP waivers, potentially removing an estimated 700,000 people from eligibility.

Should lawmakers decide to grant the Trump administration’s budget requests in totality, the authors of the report estimate the federal budget will balance by 2035 – despite Trump previously promising his administration would be able to eliminate America’s debt burden in under a decade.

Trillion dollar annual deficits, likewise, would recede after 2020. But even those targets are based in part on the premise that the U.S. economy will grow at a rate of no slower than 2.8% each year between 2020 and 2030 – and at a rate of at least 3% between 2021 and 2025.

The economy hasn’t grown in excess of 3% in any single year since 2005. And the Federal Reserve in December predicted the U.S. economy would average 1.9% annual growth between 2020 and 2022. Although Trump targeted gross domestic product expansion of 3% or more throughout his 2016 campaign, his best year of economic growth to date, in 2018, ties former President Barack Obama’s, in 2015, at 2.9%.

“We don’t need more false promises about rapid economic growth or tax cuts that will pay for themselves,” MacGuineas said. “Frankly, budgeting has become pretty much a joke in this country, where budgets are used as messaging documents and an excuse to trade insults. This year’s trillion-dollar deficit should cause us to re-think this dynamic.”

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