Budget, FY 2019: The era of Trump deficits has begun

by Jonathan Allen /  / Updated 
Image: Donald Trump
If presidential budgets reflect White House priorities, the deficit isn't one of Trump's.Nicholas Kamm / AFP - Getty Images file

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WASHINGTON — Most White House budgets are dead-on-arrival political blueprints for how the president thinks Washington should raise and spend money.

The new fiscal 2019 budget President Donald Trump released Monday fits that description.

But Trump's budget is also an indelible snapshot, a frozen image of the moment when the federal government abandoned all pretense of balancing its books.

That shouldn't be surprising, because Trump and Congress just enacted a spending law that paves the way for an increase of hundreds of billions of dollars in defense and domestic spending on the heels of a $1.5 trillion tax cut.

The result, according to Trump's budget office: the return of annual deficits nearing the trillion-dollar range for several years and a total debt increase of about $7.1 trillion over the next decade.

And that's using assumptions rosy enough to make most budget-writers blush.

"Undermining the credibility of the overall budget, it assumes an ultimate cut in nondefense discretionary spending by 40 percent when we just hiked it by over 10 percent," said Maya MacGuineas, the president of the nonpartisan Committee for a Responsible Federal Budget. "And it assumes much higher economic growth than nearly all outside forecasters."

While some conservatives have complained bitterly about new spending on the domestic programs Congress funds each year — from housing projects to cancer research — others see the widening gulf between the money raised and spent on an annual basis as a justification for a massive restructuring of entitlements like Medicare, Medicaid, Social Security and the school lunch program.

Congress funds the Pentagon, the State Department and most domestic programs out of annual discretionary funds. But entitlements, which many Americans see as a vital social safety net, pay out by law on the basis of eligibility of the applicant. The more people sign up, the more it costs the government.

"For the good of my children and grandchildren, we have got to change the way this entitlement situation works," Rep. Marsha Blackburn, R-Tenn., who is running for the Senate in Tennessee, said on Fox Business Network on Monday. "We cannot sustain this level of debt."

In other words: For some Republicans, blowing up the deficit is a feature, not a bug, of Trump's vision for the country. Not because they seek balance but because they want to justify a cycle of cutting entitlements and taxes to pare government to what they believe is its most basic functions — namely, national security and little else.

The Trump budget is a reflection of those values: Major increases in defense spending; money for a border wall; and deep cuts to entitlements. It also calls for a $1.5 trillion infrastructure plan, with the federal government on the hook for just $200 billion.

The effect would be to reverse the long-standing tradition of Washington providing the bulk of the financing for national infrastructure priorities, and put the onus on states and private entities to come up with the rest. Over time, that could erase the presumption that the federal government has the primary role in making sure bridges, highways and dams are built and repaired.

On a less ideological level, it's easier for incumbents to run for re-election after having cut taxes and boosted spending on programs that serve their local communities. Some care more about the former. Others care more about the latter.

Relatively few care about the deficit.

A January Kaiser poll indicated that only 17 percent of Americans said that was the most important issue for congressional candidates to talk about this year. The issue ranked sixth behind health care, jobs/economy, North Korea, immigration and tax cuts.

And there's no chance that Congress will rewrite any of the big three entitlement programs — Medicare, Medicaid and Social Security — in an election year. It's good campaign fodder to whip up the Republican base, but incumbents in competitive races won't want to risk a political backlash in the name of deficit reduction.

Still, House Minority Whip Steny Hoyer, D-Md., who won his seat by campaigning for smaller cuts to government than Ronald Reagan laid out in his first budget, said Monday that Trump showed "reckless" disregard for the nation's finances.

"President Trump's budget sets up our economy to fail by bankrupting the country and making it harder for the private sector to invest in creating better-paying jobs here in America," Hoyer said. "Budgets reflect priorities, and this document is a clear statement that this president does not prioritize fiscal sustainability; middle class workers and their families; investments in our economy; or stable, long-term funding certainty for our military and national security agencies."

But the fact that Trump's budget won't be enacted as it's written is of little solace to Washington's embattled contingent of deficit hawks.

If the president isn't concerned about deficits and debt — and Trump's budget is a declaration that he isn't — there's little incentive for Congress to exercise fiscal restraint. That means the era of trillion-dollar Trump deficits has begun.

CORRECTION (Feb. 12, 2018, 5:10 p.m. ET): An earlier version of this article misspelled the last name of the president of the Committee for a Responsible Federal Budget. She is Maya MacGuineas, not McGuineas.

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