February 12, 2018 / 10:20 PM / a year ago

Breakingviews - Trump budget is mostly fan fiction for Republicans

U.S. President Donald Trump smiles as he attends the ASEAN-US 40th Anniversary Commemorative Summit in Manila, Philippines, November 13, 2017. REUTERS/Aaron Favila

WASHINGTON (Reuters Breakingviews) - President Donald Trump’s budget is mostly fan fiction for Republicans. The administration is calling for big cuts to non-military programs in its $4.4 trillion budget for 2019. Last week’s two-year spending deal effectively dooms the plan, though it may offer a blueprint for GOP budget hawks. Infrastructure, meanwhile, offers one hope of bipartisan dealmaking.

The president’s proposal includes $716 billion for defense spending in the fiscal year that begins on Oct. 1, a hefty 13 percent above the Pentagon’s budget in the year that ended Sept. 30, 2017. It also includes an $18 billion request for a border wall over the next two years, as well as funding for more immigration-enforcement officers and border-patrol agents. At the same time, the plan nods to fiscal conservatives with a call to reduce the deficit by more than $3 trillion over the coming decade.

It proposes to pull off this trick with sweeping domestic-spending cuts. The plan would shrink the Environmental Protection Agency’s budget by 34 percent. Base funding for the State Department and U.S. Agency for International Development would be squeezed by 26 percent. In the longer term, healthcare programs for the poor and elderly would be slashed.

No such belt-tightening is really on the cards, though. Presidential budgets are starting points for negotiations within Congress, which controls the purse strings. Lawmakers last week agreed to boost spending caps by nearly $300 billion over the next two years as part of a deal to avoid a government shutdown. Yet with the deficit set to rise sharply in coming years, the president’s proposal could offer a template for fiscally conservative Republicans to use in the future.

The president has higher chances of getting traction with his infrastructure proposal. The budget formally unveiled a scheme to deploy $200 billion in federal funds to spur state, local and private players, and generate $1.5 trillion in total investment over a decade. It also seeks to streamline such things as environmental approvals for new projects.

Both parties favor more infrastructure investment in principle, but differ greatly over means. Any fresh taxes or borrowing will be anathema to most Republicans. Democrats want a higher share of federal funding, and may hesitate to hand the president another legislative victory before November’s congressional elections. Yet unlike most of the budget, Trump’s infrastructure ideas might at least provide a basis for the start of serious dealmaking in Congress.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

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