By Kate Davidson, Kristina Peterson and Natalie Andrews
President Donald Trump faced swift resistance from Democrats and
a range of Republicans on Capitol Hill on Tuesday after offering a
10-year plan to balance the federal budget that depends heavily on
cuts to government safety-net programs and expectations of a big
gain in economic growth.
The White House budget proposal for the 2018 fiscal year that
begins Oct. 1 would cut federal spending by $4.5 trillion over 10
years. But it leaves mostly untouched the big entitlement programs
-- Social Security and Medicare for retirees -- and proposes
increases to infrastructure spending, a new parental leave program
and a short-term boost to military spending.
With those priorities set -- in addition to the shared
Republican goal of cutting taxes -- the White House offered up
significant reductions in other spending programs to further the
aim of reducing budget deficits. But the call for rolling back
programs that touched their constituents made lawmakers
bristle.
The proposal, which serves as a recommendation to Congress, is
likely to be largely rewritten when lawmakers craft their own
budget resolutions in the coming months.
"I hate to say it, but I would say the budget was dead before
the ink was dry," Rep. Don Young (R., Alaska), who opposes the
budget's elimination of two programs in his state.
Payments to Medicaid, the federal-state health program for the
poor, would be cut by more than $600 billion over a decade from
levels projected under current law in addition to proposed Medicaid
cuts under the House bill repealing and replacing much of the
Affordable Care Act.
The food-stamp program would be cut over 10 years by $193
billion, the student-loan program by $143 billion, disability
payments by $72 billion and farm subsidies by $38 billion.
"The proposed cuts to some federal programs are not mere
shavings; they are rather deep and harmful to my district spanning
Kentucky's Appalachian region and other rural, impoverished parts
of the country," Rep. Hal Rogers (R., Ky.), a former chairman of
the House Appropriations Committee, said of the proposal.
Democrats blasted the overall budget proposal.
"This is the budget you write if you think working families have
it too easy," Sen. Ron Wyden (D., Ore.) said.
The budget also takes aim at some smaller government programs
meant to benefit people living in sparsely-populated areas loyal to
Mr. Trump. The blueprint calls for scrapping two commissions
important to Alaska, a state that Mr. Trump won by 15 points in the
November election. The budget would eliminate the Denali
Commission, which provides economic development services in Alaska,
and an Essential Air Service program, which works to ensure that
small communities offer some level of air service.
In all, nondefense spending as a share of the economy would fall
to just 1.5% by the end of the next decade, well below the lowest
level in records going back to 1962.
Besides wide-ranging spending reductions, the proposal depends
on a projection that economic growth will reach 3% by 2021 and stay
there through 2027, bolstering government revenue and holding down
the need for support programs like unemployment insurance.
That growth projection is more aggressive than the Congressional
Budget Office projection of 1.9% over a decade or the Fed's 1.8%
projection. It also assumes the country's economic expansion,
already nearly eight years old, won't be interrupted by another
economic downturn.
The plan drew praise from some Republicans for proposing to
balance the budget over 10 years and boosting military spending.
GOP lawmakers have also backed overhauling federal funding for
Medicaid in previous congressional budgets. Still, many balked at
cuts to foreign aid, farm subsidies, health-care programs for
low-income families and other programs that mattered back home.
"It's nothing new -- it's just a lot of people who don't know
what the hell is going on in farm country," said Senate Agriculture
Committee Chairman Pat Roberts (R., Kansas), who objected to
proposed cuts for farm subsidies and new limits on crop insurance,
as well as cuts to the Supplemental Nutrition Assistance program,
also known as food stamps.
Sen. John McCain (R., Ariz.), chair of the Armed Services
Committee, said the increase for the miliary was "a betrayal of the
president's commitment to rebuild our military. It's way too low
and will not restore our military from the draconian cuts that were
the result of eight years of Barack Obama's failed leadership."
With Mr. Trump traveling through the Middle East and Europe, his
deputies were left to defend the plan.
Mick Mulvaney, the president's budget director, said Monday the
plan will boost economic growth by adding workers to the labor
force, in part by requiring them to have jobs to qualify for
assistance programs such as food stamps, in addition to funding a
new parental-leave program.
The 2018 budget blueprint is especially important this year
because Republicans plan to use it as a vehicle to advance an
overhaul of the tax code. The party, which has 52 seats in the
Senate, will need to hold together most of its coalition to
proceed, but party fractures became apparent with the budget
proposal.
House Freedom Caucus Chairman Mark Meadows praised the Trump
budget's proposed cuts. But the North Carolina Republican said he
was given pause by the budget's cuts to community programs that
help fund Meals on Wheels, which provides free food service daily
to homebound individuals.
"Meals on Wheels, even for some of us who are considered to be
fiscal hawks, may be a bridge too far," said Mr. Meadows, noting
that he himself has delivered meals.
Deficit hawks also took swipes at the plan, arguing it does
virtually nothing to address the two biggest drivers of government
spending: Medicare and Social Security.
"This is not sustainable over the long-run because Social
Security and Medicare costs will continue growing rapidly even
after lawmakers have run out of other offsets," said Brian Riedl, a
senior fellow at the Manhattan Institute and former chief economist
for Sen. Rob Portman (R., Ohio).
Despite the resistance he will surely face, the president has
important allies in Congress; most notably House and Senate
leadership with a mutual incentive to ensure the Republican
economic agenda doesn't stall in Congress.
"We finally have a president who is willing to actually balance
the budget," said House Speaker Paul Ryan. Echoing the president's
promise, he said, "clearly getting to regulatory reform and tax
reform will help us grow the economy."
Senate Majority Leader Mitch McConnell (R., Ky.) said the budget
reflected "recommendations" from Mr. Trump that Republicans would
take into consideration as they write their own budgets. "We'll be
taking into account what the president recommended. They will not
be determinative," he said.
Moreover, it's by no means clear that Trump voters themselves
will abandon him even if they dislike pieces of his budget
plan.
"It takes a helluva lot to move Trump supporters away from
Donald Trump, as we've seen," said Neil Newhouse, a GOP pollster.
"So I don't think a preliminary budget proposal will do the
trick."
--Peter Nicholas contributed to this article.
Write to Kate Davidson at kate.davidson@wsj.com, Kristina
Peterson at kristina.peterson@wsj.com and Natalie Andrews at
Natalie.Andrews@wsj.com
(END) Dow Jones Newswires
May 23, 2017 19:20 ET (23:20 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.