Trump's $4.8 trillion budget likely to get thumbs-down from Congress

WASHINGTON (Reuters) – President Donald Trump’s $4.8 trillion budget plan for the coming fiscal year drew a prompt rejection on Monday from congressional Democrats, who said it betrayed his promise to protect popular health and safety-net programs.

The White House is expected to unveil the budget blueprint for the fiscal year starting on October 1 at 12:30 p.m. eastern time, but administration officials confirmed key figures from the document over the weekend.

The budget would fund the Republican president’s top priorities, including construction of a wall on the U.S. border with Mexico, while cutting hundreds of billions of dollars from safety net programs under the banner of welfare reform.

The budget is largely a political document that serves as a starting point for negotiations with Congress, and Trump’s efforts to impose steep cuts on environmental, housing and other programs have been rejected by lawmakers in past years.

Democrats said his latest proposal upended his promise in last week’s State of the Union speech to “always protect” the popular Social Security pension plan and the Medicare health plan for seniors.

“Everyone knows the latest Trump budget is dead on arrival in Congress,” Sheldon Whitehouse, a Democrat on the Senate Budget Committee, said in a statement. “It’s merely a political stunt to gratify extremists in his party.”

Trump’s budget would reduce Medicare spending by lowering drug costs and nearly halve Social Security’s disability program by tightening eligibility requirements.

It also would cut $292 billion from food stamps and the Medicaid health plan for the poor by enacting new work requirements for beneficiaries.

An administration official said the White House proposed the cuts despite an assumption that Congress, which controls U.S. purse strings, would allocate more money on spending than Trump wants.

Last year Trump signed a two-year budget deal with Congress that increased federal spending on defense and several other domestic programs, adding to growing government debt. That legislation authorized $2.75 trillion in new defense and non-defense spending through Sept. 30, 2021.

The budget includes $2 billion to fund further construction on the border wall with Mexico, a project that is especially popular with his political base, and funding for an infrastructure bill that is unlikely to be passed by Democrats and Republicans in Congress.

Military spending would rise 0.3% to $740.5 billion.

The budget forecasts $4.6 trillion in deficit reduction over 10 years and assumes economic growth at an annual rate of roughly 3 percent for years to come, officials said.

That projection is optimistic. The Congressional Budget Office last week forecast GDP growth of 2.2 pct in the current fiscal year, which ends Sept. 30, 1.9 pct in 2021, 1.7 pct in 2022 and 1.6 pct in 2023.

Real GDP increased 2.3 percent in 2019, down from 2.9 percent growth in 2018.

Trump has taken credit for the strength of the U.S. economy thanks in part to tax cuts he championed and Congress passed earlier in his term. The budget funds an extension of those cuts over a 10-year period with $1.4 trillion.

The White House proposal slashes spending by $4.4 trillion over 10 years, and reduce the deficit by $4.6 trillion in that time period.

While Trump campaigned on a promise of eventually eliminating the country’s huge debt, each year of his plan projects significant budget deficits that actually would add to that $22 trillion debt.

This year’s deficit will hover at around $1 trillion and decline next year to $966 billion if his plan were to be enacted. Even so, over 10 years, deficits would bring a $5.6 trillion increase to the debt, not counting interest payments.