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Trump budget plan slashes food stamps, healthcare for poor

By Roberta Rampton
Reuters

May 23. 2017 1:00AM
President Donald Trump's FY2018 budget is seen printed at the Government Publishing Office in Washington on Friday. (REUTERS/Yuri Gripas/File Photo)
Key points of Trump's 2018 budget proposal
The following are stories and tables about President Donald Trump's proposed budget for the fiscal year 2018 starting Oct. 1, unveiled by the White House on Monday and due to be delivered to Congress on Tuesday.

• MAIN STORY — Trump's first full budget would slash funding for healthcare and food assistance programs that help the poor while it trims the deficit. The plan — if agreed to by Congress — would cut $3.6 trillion in government spending over 10 years, balancing the budget by the end of the decade. More than $800 billion would be cut from the Medicaid program for the poor, and more than $192 billion from food stamps.

• THE WALL — Trump is asking Congress for $1.6 billion for fiscal 2018 to begin building a wall along the border with Mexico, far short of the amount needed for a project sharply criticized by Democrats and even some conservative Republicans. An internal Department of Homeland Security plan has estimated the wall's total cost at $21.6 billion.

• AGRICULTURE — The White House budget proposed $46.54 billion in cuts to federal funding for the agriculture sector over the next 10 years, with the biggest cut in the form of a $38 billion bite out of farm supports, including new limits on subsidies for crop insurance premiums and caps for commodity payments.

• FOREIGN OUTLAYS — The Trump administration's budget proposal would convert some of the United States' foreign military grants to loans, part of a larger effort to slash spending on diplomacy, aid and programs abroad by more than 29 percent.

• ENERGY — Trump's White House would sell half of the nation's emergency oil stockpile and open the Alaska National Wildlife Refuge to drilling as part of a plan to balance the budget over the next 10 years and ramp up American energy output.

• FINANCIAL REGULATION — Two Wall Street financial regulators, the Consumer Financial Protection Bureau and the Securities and Exchange Commission, would face cuts or major structural changes under Trump's budget proposal. The CFPB, created to protect borrowers from predatory lending, would undergo a “restructure” that would cut the federal deficit by $145 million, while the SEC, which polices securities markets, would have its reserve fund used to supplement its budget.

• ASSUMPTIONS — Trump's promise to balance the federal budget in a decade rests on a sustained rise to 3 percent annual economic growth and a vague “feedback” effect that lowers the annual deficit by hundreds of billions of dollars. The projections are a leap of faith that many economists and the Federal Reserve regard as unlikely.

• ECONOMY — A table detailing the main economic forecasts underlying the budget proposal

• DEFICIT — A table detailing the deficit projections from the budget proposal.

- Reuters

WASHINGTON — The White House is set to deliver President Donald Trump’s first full budget to lawmakers on Tuesday, a plan that would slash funding for healthcare and food assistance programs for the poor while it trims the deficit.

The plan would cut $3.6 trillion in government spending over 10 years, balancing the budget by the end of the decade. More than $800 billion would be cut from the Medicaid program for the poor and more than $192 billion from food stamps.

Presidential budgets are often ignored by the U.S. Congress, which controls federal purse strings. Lawmakers are expected to shy away from at least some of the many politically sensitive cuts proposed by Trump.

The budget, which covers the fiscal year that starts in October, is being delivered as the White House tries to push ahead on its pro-business economic agenda while grappling with the political fallout from Trump’s firing of former FBI Director James Comey.

Comey was leading a probe of alleged Russian meddling in the 2016 U.S. election and possible ties to the Trump campaign.

Republicans, who control the House of Representatives, the Senate and the White House, are looking for ways to cut federal spending as they pursue massive tax cuts, the cornerstone of the Trump administration’s pro-business economic agenda.

“If Congress has a different way to get to that endpoint, God bless them, that’s great,” said White House budget director Mick Mulvaney, who will defend the plan to lawmakers in hearings set for Wednesday and Thursday.

Trump, currently traveling in the Middle East and Europe on his first foreign trip since assuming office in January, will miss the unveiling of his plan.

Food stamps, farm supports

Trump’s biggest savings come from the Medicaid program. The cuts were part of a Republican healthcare bill passed by the House in early May, which aims to gut the Obama administration’s 2010 law that expanded insurance coverage and the government-run Medicaid program.

But the bill faces an uncertain future in the Senate, which is writing its own law.

The Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, would be changed to require more childless people to work and would shift more of the costs to state governments. Mulvaney said those changes would need to be made by lawmakers in the next farm bill legislation a year from now.

“We are no longer going to measure compassion by the number of programs, or the number of people on those programs,” Mulvaney told reporters on Monday.

“We’re going to measure compassion and success by the number of people we help get off of those programs and get back in charge of their own lives,” he said.

The White House also proposed radically slashing farm supports by $38 billion over 10 years, including new limits on premiums for crop insurance and caps for commodity payments.

The plan would impose user fees of $660 million per year to help pay for U.S. Agriculture Department inspectors at meat and poultry plants.

Another politically fraught line item is a proposal to cut $46 billion over a decade from the U.S. Postal Service.

The plan would also sell off half of the nation’s emergency oil stockpile to raise $16.5 billion and open up the Alaska National Wildlife Refuge to oil drilling to raise $1.8 billion.

There is some new spending. The budget includes $25 billion for a plan to give parents six weeks of paid leave after the birth or adoption of a child.

It also proposes $200 billion in funding to encourage state and local governments to boost spending on roads, bridges, airports and other infrastructure programs — even as it elsewhere cuts $95 billion from a highway funding program.

And there is $1.6 billion budgeted in the next fiscal year to begin building a wall on the southern border with Mexico.

Rosy economic forecast

Trump’s budget relies on forecasts for economic growth of 3 percent a year by the end of his first term — an increase that many economists and the Federal Reserve regard as unlikely.

Central bankers have penciled in trend U.S. growth of around 1.8 percent over the long run, while some Wall Street analysts think Trump’s tax cuts could push growth to 2.3 percent in 2020.

Trump upheld his promise — for the most part — that his budget would not cut Medicare and Social Security, two social programs that deficit hawks have long targeted for reforms.

The plan eyes cuts for Social Security Disability Insurance, but Mulvaney argued that was not a core “mainline” part of the retirement savings program.

The budget does, however, seek steep cuts to retirement benefits for federal workers as part of $63 billion in savings over 10 years for the Office of Personnel Management.

Most departments would see cuts under the plan, some of the deepest coming to foreign aid delivered by the State Department, and programs at the Environmental Protection Agency programs.

The White House provided an initial look at its proposed cuts in a “skinny budget” released in March — a document that received a tepid response from Congress.

Some budget-watchers wrote off Trump’s full budget as a wish list that would be “dead on arrival” at Congress.

But budget expert Robert Greenstein said it would be a mistake to ignore Trump’s budget because Republicans are under pressure to deliver promised tax cuts and could use the budget reconciliation process to achieve that goal.

That process would require a simple majority in the Senate, meaning Republicans would not need to count on any votes from Democrats and could more easily make the cuts, said Greenstein, president of the Center on Budget and Policy Priorities.

“We expect this budget to be the most aggressive proposal by any modern president to shift large amounts of income and resources from low- and modest-income households struggling to get by, to those at the top,” Greenstein told reporters.


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