By Nick Timiraos and Michael C. Bender 

President Donald Trump's first budget proposal would offset a nearly 2% boost in military spending from current levels by cutting funding across the rest of the government, including international aid programs, the White House said Monday.

Mr. Trump's budget proposal next month will call for setting spending at the Pentagon some $54 billion, or 10%, above budget caps already set into law for next year. The increase would translate to a funding boost of around $20 billion from current levels and avoid scheduled cuts. Defense hawks in Congress said Monday the increases were insufficient.

In promising a boost for the Pentagon -- counterbalanced by cuts for domestic agencies and foreign assistance -- Mr. Trump will plant a flag with Congress, pledging a significant reordering of America's engagement abroad. By offsetting new outlays with reductions elsewhere, meanwhile, he would defer for now any promises of economic stimulus.

"This budget will be a public-safety and national-security budget," Mr. Trump said. "It will include a historic increase in defense spending to rebuild the depleted military of the United States of America at a time we most need it."

An outline of the president's budget won't be completed until mid-March, opening the monthslong process to set funding levels for the 2018 fiscal year, which begins Oct. 1.

Mick Mulvaney, the White House budget director, called the proposal an "America-first budget" that would translate Mr. Trump's campaign promises "into policies and dollars." It would spend $603 billion on the military while nondefense spending will total $462 billion, Mr. Mulvaney said, for a swing of $54 billion in both directions against spending levels currently set to take effect under a 2011 budget law.

The funding request faces an uncertain fate in Congress, which must pass spending bills with 60 Senate votes and often adopts pieces of the president's budget proposal while discarding others. Democrats are certain to oppose drastic cuts in nondefense spending, and Republicans are split between pressing for deficit reduction and higher military spending.

"Enacting appropriations law -- as opposed to proposing nonbinding budget resolutions -- will likely require Democratic votes," just as they have in recent years, said New York Rep. Nita Lowey, the top Democrat on the House Appropriations Committee. "Democrats will not help pass laws that shift more economic burdens onto hardworking American families."

Senior Republican lawmakers said Mr. Trump's proposal didn't push Pentagon spending high enough.

After years of automatic spending curbs, "We can and should do more than this level of funding will allow," said Texas Rep. Mac Thornberry, the chairman of the House Armed Services Committee. "The administration will have to make clear which problems facing our military they are choosing not to fix."

His Senate counterpart, Arizona Republican John McCain, said the defense budget should reach $640 billion. The funding request announced on Monday, he said, was only $18.5 billion above the level President Barack Obama had proposed for the same year.

On Monday, federal agencies learned of their proposed budget allocations. The outline coming next month will include only targets for discretionary spending programs, which represent around one-third of total federal spending. The blueprint won't include proposed changes on tax policy or mandatory spending programs, such as Medicare and Medicaid. A full budget proposal would be completed by early May.

The military spending increase would be about 10% higher than if spending caps mandated by a 2011 budget law take effect this fall. Congress lifted those caps two years ago, but that deal expires at the end of the current fiscal year. Mr. Trump's proposed military spending increase would be smaller -- around 2% -- when compared with discretionary defense funding expected for the current year, according to estimates from the Congressional Budget Office.

The $54 billion in offsetting cuts is expected to fall across nondefense agencies that include the Environmental Protection Agency and the State Department. Cuts to foreign-aid funding reflect Mr. Trump's call for U.S. allies to pick up a greater share of global peacekeeping efforts, a budget official said.

Mr. Trump made military expansion a priority during the campaign, vowing in September to increase the number of active Army troops to 540,000 from 490,000 and boost the number of Marine Corps battalions to 36 from 23, or an extra 12,480 troops. He promised a Navy of 350 surface ships and submarines, up from 275 ships now, and to add about 100 fighter craft to the Air Force, bringing the total to 1,200.

The nondefense spending cuts would have to be even deeper to make space in the budget for Mr. Trump's other domestic funding priorities, including border security, care for military veterans and infrastructure. Mr. Mulvaney said agencies would recommend areas for reduction.

Officials have also said Mr. Trump won't propose any changes to Social Security and Medicare, the two largest drivers of federal spending over the coming decade.

Any effort to increase defense funding and decrease nondefense funding would require Congress also to amend a 2011 law that required across-the-board budget cuts. Congress has repeatedly loosened those caps over the past few years, but they have always maintained a parity rule that required both defense and nondefense budgets to rise by equal amounts.

It isn't clear what would happen if Congress and the White House choose to ignore the caps set in law by the 2011 bill. "I don't know if anybody would have standing to sue," said Stan Collender, a former Democratic budget aide who is executive vice president at public-affairs firm Qorvis MSLGroup.

One possibility: Congress can compromise and reach higher funding levels for both defense and nondefense spending, as it did for several years under President Barack Obama. If that happens, "the bottom line is we're talking about an increase in the deficit," said Mr. Collender.

Write to Nick Timiraos at nick.timiraos@wsj.com and Michael C. Bender at Mike.Bender@wsj.com

(END) Dow Jones Newswires

February 27, 2017 17:27 ET (22:27 GMT)

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