Happy Monday and welcome back to On The Money, where we’ve got a ton of news about the president’s budget proposal. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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A brief note on Budget Day: Each year, the president releases a budget proposal that usually lands with a thud on Capitol Hill. Members of Congress prize their ability to control federal spending, and most presidential budgets never come close to full enactment.
Trump’s latest budget includes a slew of proposed cuts and changes that will never see action in Congress. But the president’s budget is a useful view into his priorities, which helps us understand how he might handle legislation from Congress or shape regulations.
So even if Trump’s budget is already dead on arrival, we’re breaking down what it tells us about how he plans to spend the rest of his term and the promises he is making for a potential second White House stint.
THE BIG DEAL–Trump unveils $4.8 trillion budget that backtracks on deal with Congress: President Trump on Monday unveiled a $4.8 trillion budget proposal that includes spending cuts that would nullify a two-year deal negotiated with Congress last summer.
The new budget for the 2021 fiscal year, which begins in October, includes:
- $590 billion in non-defense spending
- And it anticipates about $3.5 trillion in spending on Social Security, Medicare and other entitlements (which are mandatory, automatic and not controlled through the normal funding process).
The August deal hammered out by Trump in talks with the House and Senate raised spending for both defense and domestic spending. But under the new budget, the defense figure is the same and domestic spending is cut by 6 percent through changes to a slew of federal programs and agencies.
The Hill’s Niv Elis tells us what changed and what Washington thinks of Trump’s latest budget.
Domestic cuts across the board: Some of Trump’s proposals could turn into budgetary battles later this year, even if the president won’t quite get what he wants.
The Trump budget proposes slashing Commerce Department funding by 37 percent, the Environmental Protection Agency by 26 percent, the Department of Housing and Urban Development by 15 percent, the Department of Health and Human Services by 9 percent and the Education Department by 8 percent.
The proposed budget also includes about $1 trillion in cuts to Medicaid and the Affordable Care Act over a decade, analysts said.
We’ve got more on Trump’s budget down below. And Niv threw together five big takeaways if you want a cheat sheet for the budget.
ON TAP TOMORROW
- Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee, 10 a.m.
- The House Ways and Means Committee holds a hearing entitled “The Disappearing Corporate Income Tax,” 10 a.m.
LEADING THE DAY
Trump envisions beefed up Treasury in budget proposal: President Trump’s fiscal 2021 budget, released Monday, envisions a beefed-up Treasury Department, with the administration proposing to transfer the U.S. Secret Service to the department and boost funding for the IRS.
The budget seeks $15.7 billion in base funding for Treasury’s domestic programs, including $2.4 billion for the Secret Service. Excluding the funds for the Secret Service, the budget requests $13.3 billion for Treasury, which is a 2.2 percent increase from the enacted level for this year.
The funding increase for Treasury contrasts with the significant cuts that Trump is proposing for other agencies, including the State Department, the Commerce Department and the Environmental Protection Agency. The Hill’s Naomi Jagoda explains why here.
Deficit hawks slam Trump budget economic projections as unrealistic: Budget watchers and deficit hawks on Monday excoriated President Trump’s fiscal 2021 budget proposal for relying on what they called overly optimistic economic assumptions and unrealistic plans to tackle the nation’s $23 trillion debt.
- The White House budget request to Congress assumes 3.1 percent average annual growth over the next 10 years, up from the 3 percent projected in previous Trump administration proposals. The U.S. economy has yet to expand 3 percent for any of the years that Trump has been in office.
- The economy grew 2.4 percent in 2017, before accelerating to 2.9 the following year and then slowing to 2.3 percent in 2019.
- The nonpartisan Congressional Budget Office (CBO) has projected growth will slow further to 2.2 percent this year, while the White House estimates a more robust 2.8 percent expansion.
“When you peel away the rosy growth assumptions, the assumed reversal of spending increases the President has already signed into law, and the exaggerated and unspecified savings, we are still left with a mountain of debt,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, in a statement.
GOOD TO KNOW
- Attorney General William Barr on Monday announced indictments against four members of the Chinese military for hacking into the systems of credit agency Equifax in 2017, stealing the personal information of more than 145 million Americans in one of the biggest data breaches in history.
- A group of senators, including Sen. Sherrod Brown (D-Ohio) and 2020 Democratic presidential candidate Sen. Bernie Sanders (I-Vt.), pressed Amazon in a letter on Monday over the higher-than-industry-average injury rates in its U.S. warehouses.
- Hackers are using concerns about the how the coronavirus might affect global shipping to target various industries, new research released Monday from cybersecurity group Proofpoint found.