THE BIG DEAL: President Trump released his fiscal 2019 budget this afternoon. While lawmakers usually ignore much (if not all) of any president’s budget, it’s a useful guide to a White House’s priorities and how it wants taxpayer money spent — especially in an election year. Plus, it gives policy reporters lots to write about, and intrepid readers plenty to read about.
Here’s what’s worth knowing about Trump’s budget proposal:
- The budget proposes $3 trillion in cuts meant to reduce deficits over ten years, mainly from the State Department, Environmental Protection Agency, welfare programs, Medicare, the Interior Department and a slew of federal safety net programs.
- …but it doesn’t kill annual deficits. Republicans long insisted that any federal budget should balance within ten years. This budget doesn’t do that, a major blow for anyone expecting a unified Republican government to aggressively tackle the debt.
{mosads}
About that: White House budget chief Mick Mulvaney said Sunday that rising federal deficits could force interest rates to spike.
- The budget asks for $18 billion for the border wall, and millions of dollars to hire more border patrol agencies and max out detention centers for undocumented immigrants.
- The budget doesn’t match the caps passed in last week’s bipartisan deal. The proposal was written before the $300-billion budget deal to kill 2011 spending caps was enacted, but includes an addendum from the Office of Management and Budget. The White House wants Congress to fully match the new defense spending limit, but asks for $57 billion less than the discretionary domestic cap.
The Hill’s Naomi Jagoda breaks the rest down here, and you can read the budget yourself here.
How lawmakers responded to Trump’s budget:
- “…a thoughtful, detailed, and responsible blueprint for achieving our shared agenda,” – House Speaker Paul Ryan (R-Wis.)
- “…a brutal collection of broken promises and staggering cuts…” – House Minority Leader Nancy Pelosi (D-Calif.)
- “…an important first step in the 2019 budget process – but it is just that, a first step.” – Senate Budget Committee Chairman Mike Enzi (R-Wyo.)
- “…a budget for the billionaire class, for Wall Street, for corporate CEOs, for defense contractors and for the wealthiest people in this country.” – Sen. Bernie Sanders (I-Vt.)
- “…a starting point…” – Senate Appropriations Committee Chairman Thad Cochran (R-Miss.)
- a proposal with “…deep cuts to the State Department and USAID that would have undermined our national security.” House Foreign Affairs Committee Chairman Ed Royce (R-Calif.)
What comes next: Office of Management and Budget Director Mick Mulvaney and Trump cabinet officials will testify before various committees in the coming weeks. Expect lawmakers to use the hearings to highlight their pet issues before they return to ignoring the president’s budget for the rest of the year.
INFRASTRUCTURE WEEK (This time for real): The White House released its long-awaited infrastructure plan Monday a $1.5-trillion framework that would focus on public-private partnerships and funding from state and local governments.
The plan is structured around four main goals: generating $1.5 trillion for an infrastructure proposal, streamlining the permitting process down to two years, investing in rural infrastructure projects and advancing workforce training.
The catch: The federal government would contribute $200 billion to the package, and expects states and public-private partnerships to pick up the rest. Democrats say that total isn’t nearly enough to fix what’s wrong.
The Hill’s Mallory Shelbourne breaks it down like a woefully decrepit stretch of interstate: http://bit.ly/2o5IjBp.
What comes next: It’s hard to say. Infrastructure is one place Democrats, especially senators up for re-election this year in red states, could score easy points for bipartisanship and accomplish long-sought goals. A survey conducted by Prudential Financial and Morning Consult found that 82 percent of Americans think investing in infrastructure should be a priority for the U.S. government this year.
Not so fast…But with an election year and a toxic political climate, don’t expect Congress to move on infrastructure. Adding to Trump’s woes: After the two-year budget deal signed last week, fiscal conservatives are not eager to sign on to infrastructure spending.
Happy Monday and welcome to a new look Overnight Finance. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
See something I missed? Let me know at slane@digital-stage.thehill.com or tweet me @SylvanLane. And if you like the newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.
LEADING THE DAY:
Exploring Trump’s budget
- A list of 22 agencies and programs Trump’s budget would eliminate, from The Hill’s Brett Samuels
- Trump wants $686 billion for the Pentagon so the U.S. can get a leg up on Russia and China. The administration says: “Long-term strategic competitions with China and Russia are the principle priorities for the Department, and require both increased and sustained investment … because of the magnitude of the threats each pose to U.S. security and prosperity.” The Hill’s Ellen Mitchell explains.
- Nearly every agency under the Health and Human Services Department would see a funding cut, according to The Hill’s Jessie Hellmann. The exceptions would be the National Institutes of Health (NIH), the Food and Drug Administration (FDA) and the Indian Health Service, which would all see modest increases.
- The budget proposes significantly slashing a handful of controversial loan and research programs at the Department of Energy (DOE). The Hill’s Timothy Cama tells us why.
But what does it mean for financial regulations?: The Trump budget calls for Congress to take control of funding for the Consumer Financial Protection Bureau, the Financial Stability Oversight Council and the Office of Financial Research. This has been a longtime goal of Republicans aiming to reign in the Dodd-Frank Act, but one that can’t happen this year without Democratic support.
Only a handful of Democrats support changing Dodd-Frank at all, and the changes they support focus on tweaking specific policies, not shifting the fundamental makeup of these agencies. In other words, it isn’t happening.
Trump’s budget does call for funding increases at Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and calls for the CFTC to start charging user fees. That earned the White House praise from (of all places) Better Markets, the progressive nonprofit that’s opposed nearly all of Trump’s financial regulatory nominees, decisions and priorities.
“While more resources are needed, this is nonetheless an important recognition that the cops on the Wall Street beat don’t have the funding they need to do their jobs protecting the American people,” said Dennis Kelleher, president and CEO of Better Markets.
Tariff time? Trump said Monday that he will propose a tax on imports as soon as this week in an effort to crack down on what he believes are unfair trade practices.
“We’re going to be doing very much a reciprocal tax and you’ll be hearing about that during the week and the coming months,” Trump said at the White House while rolling out his infrastructure plan.
“We cannot continue to be taken advantage of by other countries,” the president added. “We are going to charge countries outside of our country … Some of them are so-called allies, but they are not allies on trade.”
The president did not elaborate on the details of the so-called reciprocal tax: http://bit.ly/2kovsdb.
Did Trump tell the White House? White House officials quickly downplayed Trump’s remarks Monday afternoon, according to Ana Swanson at The New York Times. One senior administration official said there was “nothing formal right now.”
MARKET CHECK: Climbing. Stocks carried their Friday rebound into trading Monday, recovering some of the steep losses experienced during the two-week sell that started Jan. 26.
- Dow Jones Industrial Average: Up 410 points (1.7 percent)
- Nasdaq: Up 107 points (1.6 percent)
- S&P 500: Up 36 points (1.4 percent)
GO DEEPER:
- The Hill’s Naomi Jagoda tells us how the GOP and Dems are playing the raises companies are tying to the tax-cut bill.
- A survey released this week shows that analysts expect only 13 percent of companies’ savings from the new tax law to go to workers in the form of bonuses, raises and employee benefits.
- The Hill’s Vicki Needham and yours truly explore how the Republican Party is at a crossroads on the deficit , and what it means for the economy.
ODDS AND ENDS:
- Mick Mulvaney’s balancing act as OMB director and temporary CFPB chief reached peak irony Monday when his duties in one role involved slamming the responsibilities he has in another. The White House budget condemned the CFPB’s “single unaccountable director who is able to draw funding from the Federal Reserve without oversight from the Congress.” Okay, Mulvaney has long protested against the CFPB’s power, and is now reining it back from within the bureau. His views on the bureau are no surprise, but no less jarring when directed at himself. Mulvaney’s first request from the Fed was for $0 and plans to fund CFPB operations through the bureau’s nearly $170 million reserve.
- State Attorneys General Xavier Becerra (D-Calif.), Eric Schneiderman (D-N.Y.) and Maura Healey (D-Mass.), joined by 16 others, sent a blistering letter Monday warning Commerce Secretary Wilbur Ross against approving a question about citizenship status in the 2020 Census.
Doing so, they said, would be unconstitutional. The Hill’s Lydia Wheeler tells us why.