Much ink is being spilled on President Donald Trump’s latest proposed budget cuts and spending increases for fiscal year 2020. So it’s worth reminding you that Congress typically ignores almost all the policy proposals in the White House’s annual spending blueprint and makes its own decisions on which programs to slash, eliminate or bulk up. That’s its constitutional prerogative.
Nevertheless, there are at least two notable things about Trump’s third budget proposal, aside from the hammering of safety net programs, the increased tax cuts and the heaping helping of cash for the military it quixotically proposes.
First, the president’s use of emergency powers to steer billions of dollars to his wall project in February hovers over the proceedings like a thunderhead. The message Trump sent with that declaration was that he did not respect the budget process; if he wants money for something, he will find a way to write himself a check for it.
The new budget, released Monday, seeks an additional $8.6 billion to complete construction of the wall, above and beyond the billions that Trump maneuvered to the wall through the emergency declaration. That invites the question, what happens if Congress again refuses to provide the full amount? And beyond that, what might be the next “crisis” that Trump uses to justify funding something he wants, irrespective of what the congressional number crunchers decide to appropriate?
If you’re looking for hints in the proposed budget, consider how Trump is trying to get around the statutory budget cap on defense spending. The president is so eager to spend more on the military, he is proposing to circumvent the $576-billion cap by laundering money through the uncapped fund for “overseas contingency operations,” that is, the wars in Afghanistan and Iraq. That account would swell from $69 billion currently to $165 billion; throw in an additional $9 billion for “emergency requirements,” and you’ve got a prodigious $750-billion defense budget.
So, what happens if Congress doesn’t agree to launder money for defense through the overseas contingency account? The usual answer is that Democrats insist that any increase in defense funding be matched dollar-for-dollar by increases in domestic programs, as per the 2011 Budget Control Act. An administration budget official who insisted on not being identified by name told reporters Monday that this sort of parity was out of the question in light of the burgeoning budget deficit — a problem, he insisted, that was caused by spending, not tax cuts. But not, evidently, by defense spending.
The second notable thing is the amount of concern the administration has expressed about the huge deficits Trump has run up — unprecedented for an economy not recovering from a recession or burdened by a world war — without acknowledging what Trump is doing to drive those numbers higher.
Yes, over the long term, entitlement programs are the real fiscal problem for the federal government. That’s especially true of the healthcare-related entitlements, such as Medicare and Medicaid. But the administration has made matters considerably worse with its open-checkbook approach to defense spending and the tax cuts it helped push through Congress in 2017. In fact, the budget proposes to extend permanently the tax cuts for individuals and capital gains, which are set to expire in 2025 and 2026, respectively.
Deficits are not necessarily a problem as long as they are kept small when the economy is healthy. They’re a problem when they outpace economic growth year after year, as they’re doing now and, under the Trump budget, for the next several years. The administration is right to tell Congress to take this issue seriously; it just hasn’t taken a serious position itself.