President Donald Trump is releasing a $4.7 trillion budget plan Monday that stands as a sharp challenge to Congress and the Democrats trying to unseat him, the first act in a multifront struggle that could consume Washington for the next 18 months.
The budget proposal dramatically raises the possibility of another government shutdown in October, and Trump used the proposal to notify Congress he is seeking an additional $8.6 billion to build sections of a wall along the U. S.-Mexico border.
The budget also calls for increased military spending, another in a string of proposals that prompted Democrats to label the budget a nonstarter that will not win congressional support. If lawmakers and Trump don’t reach a spending agreement by the end of September, many government operations will ground to a halt.
Trump’s “Budget for a Better America” also includes dozens of spending cuts and policy overhauls that frame the early stages of the debate for the 2020 election. For example, Trump for the first time calls for cutting $845 billion from Medicare, the popular health care program for the elderly that, in the past, he largely had said he would protect.
His budget also would propose a major overhaul of Medicaid, the health care program for low-income Americans run jointly with states, by turning more power over to states. That would save $241 billion over 10 years.
Other agencies, particularly the Environmental Protection Agency, the State Department, the Transportation Department and the Interior Department, would see their budgets severely gutted.
“With severe cuts to essential programs and services that would leave our nation less safe and secure, the Trump budget is as dangerous as it is predictable. It has no chance in the House,” House Budget Chairman John Yarmuth, D-Ky., said ahead of the document’s release.
More broadly, Tump’s budget would impose mandatory work requirements for millions of people who receive welfare assistance while dramatically increasing the defense budget to $750 billion next year, a 5 percent increase from 2019.
Trump and other Republicans have said the federal budget is full of waste and bloat, and that many federal agencies still could perform their functions with less taxpayer assistance. And even though they have proposed budget cuts before, only to be rejected by Congress, his top advisers want to dig in on the cuts this year, convinced Americans will support them.
Still, according to Trump’s budget, the spending cuts would do little to reduce what is shaping up to be a colossal deficit in the next several years. The budget would spend much more money than it brings in through revenue, and that gap is called the deficit.
The budget foresees a $1.1 trillion deficit in 2019, 2020, and 2021, and a $1 trillion deficit in 2022.
These deficits will add to the existing $22 trillion debt and would put further strain on the budget. For example, the White House now projects the government will spend $482 billion on interest payments for the debt next year, more than the entire budget for Medicaid, which provides health care benefits for millions of people.
Republicans have long called for taking steps that shrink — or even eliminate — the deficit, and putting forward a plan that would create $4.3 trillion in new debt over four years could give Democrats fresh targets on the campaign trail.
There is a crowded field of Democrats seeking to win their party’s primary to challenge Trump next November. While Trump has called for boosting the military, cutting taxes, and cutting the budgets of domestic agencies and social welfare programs, many of the Democrats have proposed something much different.
Several have called for raising taxes on the wealthiest Americans, expanding access to Medicare, and providing more benefits that help pay for college.
White House officials believe Trump’s economic agenda has proven very successful so far, leading to job growth, higher wages, and economic growth. But critics have alleged that he achieved that in part through huge levels of fiscal stimulus, including tax cuts and spending increases, that have widened the deficit and added several trillion dollars to the government’s debt.
The budget does reflect the changing nature of Trump’s agenda since taking office.
He has continued to try to pump more money into the military and border-security programs, and the budget provides funding for the creation of a “Space Force,” and a U.S. Space Command, ideas Trump personally has pushed even while he ran into some resistance from military leaders and congressional Republicans.
While his Democratic rivals for the White House next year ramp up their attacks on his policy agenda, Democrats in Congress are planning to challenge him in the coming months on his budget plan. In addition to the Sept. 30, 2019 deadline to reach a spending agreement, lawmakers believe they also will need to reach an agreement to raise the debt ceiling about that time.
The debt ceiling is a borrowing cap established by Congress, and it prohibits the Treasury Department from issuing more debt. The government is bumping up against the debt limit now, and the Treasury Department has begun emergency steps to buy more time so Congress eventually can vote to raise it. Several lawmakers have said they expect the debt ceiling to be raised as part of a broader budget deal this summer or fall.
But if budget talks bog down later this year amid a fight over border wall funding, it could force lawmakers to rethink this timeline and their entire approach.