WASHINGTON — President Donald Trump released a $4.8 trillion budget proposal Monday that includes a familiar list of deep cuts to student loan assistance, affordable housing efforts, food stamps and Medicaid, reflecting Trump’s election-year effort to continue shrinking the federal safety net.
The proposal, which must be approved by Congress, includes additional spending for the military, national defense and border enforcement, along with money for Trump’s Space Force initiative and an extension of the individual income tax cuts that were set to expire in 2025. Its biggest reduction is an annual 2% decrease in spending on discretionary domestic programs, like education and environmental protection.
Speaking to the nation’s governors at the White House on Monday, Trump said that his budget proposal would bolster the U.S. military and nuclear arsenal and bring the deficit close to zero in “not that long a period of time.”
However, Trump’s budget does not estimate wiping out the deficit until 2035 and gets there only through rosy assumptions about economic growth — an area where the administration’s past predictions have proved to be overconfident — and the continued ability of the government to borrow money at rock-bottom rates. It also projects adding $3.4 trillion to the national debt by 2024, at the end of a potential second Trump term.
Despite the hefty borrowing, Trump’s budget does not detail another round of tax cuts that his administration has suggested he will pursue if he wins reelection. Instead, it extends for 10 years the expiring cuts contained in the tax overhaul Trump signed in 2017, at an estimated revenue loss of about $1.4 trillion. The budget also assumes large amounts of new military spending, including $3.2 billion — a $459 million increase — to help develop a high-speed weapon capable of evading missile defense systems and $18 billion for the newly established Space Force.
“We’re going to have a very good budget with a very powerful military budget, because we have no choice,” he said, adding that he was aiming to reduce spending by rooting out “waste and fraud.”
The White House budget is largely a messaging document that reflects the administration’s spending priorities. While Monday’s proposal is similar to the president’s previous requests, it is a stark contrast with his leading Democratic rivals for the White House, who have proposed large tax increases on the rich and expansions of government efforts to provide health care, education, affordable housing and aid for the poor.
For instance, at a time when many Democratic candidates are proposing sweeping efforts to forgive student loan debt and make some or all public colleges tuition-free, Trump’s budget again recommends eliminating subsidized federal student loans and ending the public service loan program. The program is an incentive for teachers, police officers, government workers and other public servants that cancels their remaining federal student loans after a decade of payments. Those proposals were in last year’s budget, but Congress did not adopt them.
The budget also calls for the creation of a single income-driven loan repayment program, to replace what has become a confusing jumble of different payment plans. Under the administration’s plan, borrowers would pay 12.5% of their discretionary income toward their loans, instead of the 10% many currently pay.
The administration would drastically change the way states are allocated funding for programs that support disadvantaged K-12 students. The budget proposes consolidating 29 programs into a $19.4 billion block grant that would dispense funding to states, who would then determine how to use it. Among the programs that would be zeroed out to fund the grant are 21st Century Community Learning Centers, which funds after-school programs for low-income students; funding for programs in rural schools and magnet schools; and funding for homeless and migrant students.
The measure would overhaul the role of the Education Department, reducing its staff and administrative costs, and “empower states and districts to decide how to best use federal funds to meet the needs of their students,” the department’s budget said.
The budget also proposes creating an entirely new agency to police tobacco, moving that responsibility out of the Food and Drug Administration and into the Department of Health and Human Services.
The proposal is also notable for what it did not include. In previous years, Trump’s budget has proposed repealing the Affordable Care Act and replacing it with a system that would provide block grants of funding to states with far fewer rules about how the money should be spent. The new budget backs away from that approach. It leaves the law’s funding in place but asks Congress to develop policies that would “advance the president’s health reform vision,” with a corresponding price tag, which it says would save $844 billion over the decade.
The budget’s approach to health care is particularly striking given the administration’s actions in court. The White House has joined a lawsuit brought by a group of Republican states that would seek to invalidate all of the Affordable Care Act. The Supreme Court is deciding whether it will take up that case or allow the lower courts to continue reviewing it. The president has repeatedly promised to release a health care plan that could be deployed if he wins in court, but has yet to do so.
The budget still makes major changes to health care programs, including several that would tend to lower federal spending on Medicaid, by reducing the share of medical bills the federal government will pay for the Obamacare expansion population and imposing new requirements on beneficiaries who wish to enroll. All together, it proposed combined cuts to spending in Medicaid and Affordable Care Act subsidies that equal $1 trillion — cuts that would mean substantial program changes.
Democratic candidates, in contrast, have offered detailed plans, which typically cost trillions of dollars raised via new taxes on corporations and the rich, to expand health care coverage and reduce costs for American patients. Health care remains a top issue for many of Trump’s supporters, while Democrats’ “Medicare for All” plans have fared well in many opinion polls.
Democrats dismissed the budget out of hand and vowed to prevent the changes from going into effect. House Speaker Nancy Pelosi of California accused Trump of “a complete reversal of the promises he made in the campaign and a contradiction of the statements he made at the State of the Union.”
Rep. Richard Neal of Massachusetts, the House Ways and Means Committee chairman, said that when he saw the budget, “I felt an immense sense of relief — relief that there is absolutely no chance of his ruthless cuts to critical programs ever becoming law.”
The budget maintains the administration’s tradition of highly optimistic economic growth forecasts, which have not borne out the past two years. Even then, it would leave the federal budget deficit only slightly smaller at the end of a possible second term for Trump, in 2024, than it was the year before he took office.
In what Trump said was an attempt to “put our nation on a fiscally sustainable course,” he proposed reducing a scheduled pay raise for civilian federal workers in 2021 to 1% from 2.5%. Congress can set its own levels in spending bills later this year.
While Republicans have made relatively little noise about the ballooning federal deficit since Trump took office, some lawmakers suggested on Monday that the budget would not pass muster with fiscal conservatives.
“Presidents’ budgets are a reflection of administration priorities, but in the end, they are just a list of suggestions, as the power of the purse rests with Congress,” said Sen. Michael Enzi, R-Wyo., the chairman of the Senate Budget Committee. “Bipartisan consensus will be necessary to bring our debt and deficits under control. I hope to work with my colleagues on both sides of the aisle to put our country on a more sustainable fiscal course.”
Sen. Kevin Cramer, R-N.D., sent out two statements that, while initially complimentary of Trump’s efforts to cut federal spending, voiced concern with cuts to both defense and agriculture programs. Cramer said he disagreed with a number of defense provisions, including “cuts to intelligence-gathering resources for our military.” He also said that cuts to certain farm programs “would save little but inflict severe pain in American agriculture.”
Democrats do not plan to release a separate budget proposal, pointing to the overall figures for military and nonmilitary spending approved in the summer’s bipartisan budget deal.
Trump’s budget avoids some hot-button issues that Democrats could seek to turn against the president in November — notably by not reducing Social Security or Medicare benefits. Most of the administration’s initiatives to save money on Medicare are cost-reduction proposals first offered under President Barack Obama.
In other areas, like climate policy, Trump continued to pick fights with Democrats in Congress and on the campaign trail.
The administration reserved some of its deepest cuts for the Environmental Protection Agency, which would face a 26% reduction in funding and the elimination of 50 programs that Trump deemed “wasteful” or duplicative. The budget would shrink the agency to funding levels it last saw during the 1990s and focus it on “core functions” like addressing lead exposure in water and revitalizing former toxic sites, while excluding efforts like beach cleanup. It does not mention climate change.
Congress has typically ignored the administration’s proposals for cuts to the agency. Democratic presidential candidates have proposed trillions of dollars in new spending to reduce carbon emissions and try to stem the resulting rise in global temperatures.
Administration officials appeared to make little effort on Monday to sell congressional Democrats on the budget’s proposals. They canceled a planned briefing for some Democratic staff members, two congressional aides said. One aide said it was because elements of the budget leaked Sunday night. A senior administration official confirmed the cancellation of the briefing because of the leaks, but a separate bipartisan, bicameral briefing remained scheduled.