President Donald Trump will make a cost-cutting opening budget offer Monday that will dismiss hopes for a grand budget deal and likely stoke fresh fears of another government shutdown.
Trump will put on paper what the White House has already prepared lawmakers to receive — an audacious plan for sucking 5 percent from the budgets of non-military arms of the federal government, while using an accounting trick to bust beyond set spending limits for defense programs. The 5 percent would be below the fiscal 2019 budget limits for domestic agencies.
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Trump in his budget request also is expected to rekindle partisan feuds over the border wall, project robust economic growth above 3 percent, take longer to balance the books than Republicans have advocated in the past and pay for a new Space Force within the Air Force.
Although the request is merely a messaging document, the president’s posture will contribute to apprehension about a government shutdown, some seven months before federal funding runs out again on Sept. 30.
On Capitol Hill, even Republicans are saying the president will need to come to the realization that the GOP must give some ground this year to Democrats, who hold the House majority and 47 seats in the Senate. But the Trump administration wants to hold fast to its mission to slash spending.
“Congress wants an automatic big-spending deal, and now they’re upset because they lost their favorite talking point that the president’s budget assumes a caps increase,” a senior administration official speaking on background said Saturday, referring to an increase in budget limits set eight years ago. “Congress hasn’t grappled with their spending addiction since 2011, and the administration is forcing the conversation before the debt crisis worsens.”
In recent years, Democrats in Congress have insisted that spending increases above the budget caps remain equal for defense and non-defense spending. But Trump administration officials say the president won’t bend this time to those demands of funding “parity.”
Congressional Republicans say that could produce another stalemate and shutdown. “Sorry, you’re elected to deal, you’ve got to deal,” said Rep. Tom Cole (R-Okla.), who chairs the spending subcommittee that funds the departments of Education, Labor and Health and Human Services. “They’re going to all have to compromise … And the longer they delay, the more threatening it will be to the economy, the more likely we are to slide into some sort of confrontation that results in a government shutdown.”
Besides 5 percent cuts below fiscal 2019 caps for non-defense programs, Trump’s budget request is expected to project economic growth of 3.2 percent this year, 3.1 percent in 2020, 3 percent in 2021 and 2.8 percent in 2026, with a 10-year forecast of 3 percent.
The plan will also seek to balance the budget within 15 years, by 2034, rather than bringing spending in line with revenue over the typical 10-year period that’s been a goal for Republicans.
The budget request is expected to restart partisan feuding over funding for a wall along the U.S.-Mexico border. Although the administration has not said how much money the president will propose for that project, the request is expected to be substantial enough to evoke the same kind of rebuke from congressional Democrats that led to the veto threat that spurred the 35-day shutdown that began just before Christmas last year.
Through the request, Trump will seek $100 million for the Women’s Global Development and Prosperity Initiative his daughter and adviser, Ivanka, is spearheading with an aim to assist 50 million women in developing countries by 2025 through aid programs and partnerships with private businesses.
The president will ask Congress to fund a new Space Force within the Air Force, a project expected to cost $72 million in fiscal 2020 with a 200-person headquarters and eventually grow to about 900 people for a cost of about $500 million a year.
In the plan, the Trump administration will detail reforms to eliminate duplication and increase efficiency within federal agencies.
When a president’s annual budget request arrives on Capitol Hill, lawmakers love the retort: “The president proposes, Congress disposes.” Spending leaders are already taking this year’s plan less seriously, however, than past presidents’ wish lists.
“This one is frankly less realistic than most presidential budgets,” said Cole, calling it a “gimmick” to avoid budget limits by trying to stash $174 billion of $750 billion in defense funding within the Overseas Contingency Operations fund that doesn’t count toward the caps. “That’s fine, but Congress isn’t going to accept that.”
Senate Appropriations Chairman Richard Shelby (R-Ala.) said last week that it would be hard for Congress to find consensus to cut non-defense programs by 5 percent, as the president seeks. “Plus, you’ve got the House, too. You’ve got a third leg of politics,” Shelby said.
Congress has less than seven months to pass spending bills to fund the government in fiscal 2020, which begins on Oct. 1. An overarching deal on limits for defense and non-defense funding is the first step in that process. From there, spending leaders can divvy up limits among the 12 annual spending bills, then among each federal department, agency and program.
“We’ve got to figure out a number,” Shelby said. “Ultimately, when we put a bill together, we’ve got to have some numbers we can agree to.”
White House budget director Russell Vought already signaled that the Trump administration may oppose any congressional deal to raise the budget caps, citing “unsustainable” levels of borrowing, in an op-ed last month. And it would not be out of the question for Trump to ultimately veto such a deal, if congressional leaders tune out his demands.
House Budget Chairman John Yarmuth (D-Ky.) insists, however, that there is already bipartisan agreement on raising caps for both defense and non-defense spending. Democrats will at the very least seek to raise caps equally for non-defense programs and the military, he said, while pursuing greater investment in things like education and health care.
“There is bipartisan consensus on Capitol Hill that we must raise the caps for both non-defense and defense discretionary spending levels … The Administration’s plan to delay is a total disregard for responsible governing,” Yarmuth said in a statement Saturday.
The Trump administration’s renewed focus on fiscal responsibility comes after two years of ignoring a ballooning deficit and shepherding passage of a tax overhaul that contributed to a federal debt of more than $22 trillion.