President Donald Trump’s first full budget proposal was met with lukewarm statements by members of his own party and attacks by Democrats on Capitol Hill, signaling it may have trouble gaining traction.
The $4.094 trillion fiscal 2018 budget plan, formally released May 23, aims to see a small budget surplus in 2027, its 10th year, without raising taxes while moving money to Republican priorities like defense outlays. To do that, the plan proposes substantial cuts in a wide variety of federal programs and assumes faster economic growth than most economists believe is sustainable.
Mick Mulvaney, the former Republican congressman who now heads the White House Office of Management and Budget, said the plan is meant to boost economic growth over the long run, while critics, including anti-deficit groups and Democrats on Capitol Hill, called it unrealistic and harsh.
Mulvaney, talking to reporters at the White House, defended the assumption of 3 percent annual economic growth in the last seven years of the 10-year budget window.
“It’s what drives every one of our policies, especially when it comes to anything dealing with jobs and the economy. We will bring back 3 percent economic growth to this country, and those numbers are assumed in this budget,” he said.
While the nonpartisan Congressional Budget Office, as well as many business economists, has pegged the economy’s long-term growth rate at just below 2 percent annually or close to that, Mulvaney said those forecasts weren’t optimistic enough.
“That is a pessimistic look at what the potential for this country and for what this country’s people is. We reject that pessimism,” he said.
Anti-deficit budget groups called the budget unrealistic, both for its growth projections but also for assuming budget cuts that are likely to be politically unpalatable on both sides of the aisle.
“The driving force of deficit reduction in this budget is the supposed super-charged economic growth effect of an unspecified tax cut,” said Concord Coalition Executive Director Robert Bixby. “That alone calls the credibility of the budget into question.”
“The budget balances on paper—and having a specific fiscal goal—is an important first step. But it only achieves that goal by relying on incredibly rosy economic growth assumptions along with very aggressive and unrealistic future cuts, while omitting a potentially extremely costly tax reform plan,” said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.
On Capitol Hill, many Republicans declined to embrace the plan, saying Congress would write its own blueprint when it considers a fiscal 2018 budget resolution later in the year.
“It’s a recommendation. We’ll take these things into consideration and move forward. What I do like about it because it clearly focuses on increasing defense spending, which we know is absolutely critical given the threats that we face,” Senate Majority Leader Mitch McConnell (R-Ky.) said.
Rep. Rodney Frelinghuysen (R-N.J.), chairman of the House Appropriations Committee, noted in his statement that the power of the public purse lies with Congress and lawmakers will make their own decisions on funding programs.
“The Appropriations Committee has already begun this process, and it will continue rapidly over the next weeks and months. We intend to work as quickly as possible—while maintaining the highest standard of responsibility—to complete the fiscal year 2018 Appropriations bills in a timely fashion,” he said.
Some Republicans, though, said Trump had taken a needed step with the budget. Rep. Jim Jordan (R-Ohio), a founder of the House Freedom Caucus, said, “The ball is now in the House’s court to write a budget that is fiscally responsible and reflects the priorities of American families and taxpayers, which President Trump has recognized.”
When the House will get to work on its budget resolution is unclear, though sometime in June is a possibility. House Budget Chairman Diane Black (R-Tenn.) said she plans on it also hitting balance within 10 years, as the Trump plan aims to do. A Senate Republican aide said a budget markup in committee could happen there in mid- to late June.
McConnell told reporters he planned to begin talks in the “near future” with Democrats on fiscal 2018 appropriations levels, a stance that could complicate the process of writing a budget outline that usually sets that figure.
Congressional Democrats criticized the budget cuts as too deep.
“While his budget invests in tax cuts for the wealthy, it is a very clear disinvestment in our future and the hardworking Americans that spur economic growth and strengthen our communities,” Rep. Mike Quigley (D-Ill.) said.
Sen. Bernie Sanders (I-Vt.), the ranking member of the Senate Budget Committee, smiled when asked if he planned to try to force a Senate floor vote on a budget resolution based on the Trump budget—a tactic Republicans used to embarrass Democrats when they held the chamber in the Obama administration.
“That may well be a possibility,” Sanders said.
To contact the reporter on this story: Jonathan Nicholson in Washington at email@example.com
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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