President Trump Releases First Full Budget Proposal
President Donald Trump’s proposed budget for Fiscal Year 2018, which begins on October 1, would eliminate funding for 66 federal agencies or programs, including the Corporation for Public Broadcasting and the National Endowment for the Arts.
President Donald Trump’s proposed budget for Fiscal Year 2018, which begins on October 1, would eliminate funding for 66 federal agencies or programs, including the Corporation for Public Broadcasting, National Endowment for the Arts, National Endowment for the Humanities, and the Green Climate Fund.
The proposed $4.1 trillion budget spends about the same as was spent in fiscal year 2017 and increases annual military spending by $52 billion while reducing discretionary domestic spending by about $26.7 billion.
The budget proposal also forecasts lowering tax rates will spur private economic growth by 3 percent per year.
Romina Boccia, deputy director of The Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies, says Trump’s budget proposal is intended to help grow the economy.
“The primary purpose of this budget is to promote economic growth, but it comes as part of a combination of policies,” Boccia said. “The other purpose is encouraging people to go back to work through work requirements and welfare programs and by experimenting with different programs, perhaps a temporary, needs-based benefit for disability, to increase labor-force participation among those who have dropped out.”
‘Slim on Details,’ Cuts
The proposed budget’s spending cuts, Boccia says, are not enough to create a sustainable long-term federal budget.
“The president’s budget is slim on details, both on the tax side and on the policies that the president projects will lead to the economic feedback effects that are being used to balance the budget,” Boccia said. “Going forward, the president should warm up to more spending cuts and especially reforms in Medicare and Social Security, in order to achieve a fiscally credible budget that can bring about long-term, sustainable budget balance.”
Moderation on Infrastructure
On June 5, Trump held a ceremonial event in the White House’s East Room to celebrate a week of planned campaign events promoting proposed changes to federal infrastructure spending included in the larger budget proposal.
At the ceremony, Trump signed a “Statement of Principles” to be sent to Congress outlining his ideas for government infrastructure spending.
Ryan Bourne, the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute, says he’s relieved Trump’s infrastructure plans wouldn’t just fill potholes with taxpayer money.
“We were all kind of expecting a major push on federal infrastructure spending, and to a certain extent, Trump’s budget has allayed some of the fears of conservatives and libertarians that there’s going to be a huge splurge,” said Bourne. “It wasn’t the huge increase in federal infrastructure spending that perhaps many were expecting.”
Framing the Issue
Congress will have to work with Trump to fill in some of the details in the president’s road-spending plan, but the framework has been established, Bourne says.“The budget did specifically outline that that money would be used to try to harness more private and state investment,” Bourne said. “We’re not entirely clear how that will work at the moment—what incentives that will use, whether it will be tax credits or direct federal spending, or whatever—but there has been provision in the budget for $200 billion to be set aside for infrastructure investment.”