Key Takeaways From Trump’s Budget Proposal
President Donald Trump unveiled a $4.8 trillion spending blueprint for the upcoming fiscal year that proposes billions more for defense and a U.S. mission to Mars but would cut deeply into other operations including the Environmental Protection Agency.
The proposal, released Monday, is unlikely to get through Congress but does reveal the administration’s policy priorities. It projects economic grown above 3% and would add $5.6 trillion in deficits over 10 years. The 2021 fiscal year begins Oct. 1.
Here are some key takeaways:
Farmers go from bailout to subsidy cuts under plan
After authorizing $28 billion in trade assistance for farmers over the past two years, Trump is targeting farm subsidy programs. He proposes $36 billion in cuts over the next decade to federal funding for crop insurance, conservation and commodity programs.
The budget also continues Trump’s campaign to cut food stamps, which his administration has pursued through regulatory changes such as stricter work requirements. He promises savings through “bold proposals” to tighten eligibility. The budget also reprises past Trump proposals to provide more food assistance through “harvest boxes” of American-grown commodities for beneficiaries.
The budget would cut the U.S. Department of Agriculture discretionary budget by 8% in the 2021 fiscal year and targets entitlement programs such as food stamps and farm subsidies for an $240 billion cutback during the next decade.
The budget also reprises a prior Trump proposal to make it harder for wealthy farmers to receive subsidies. Trump would lower the maximum income for farmers eligible for commodity and conservation subsidies to $500,000 annually from the current $900,000 limit. He would also extend the income limit to subsidized crop insurance, a key farm assistance program.
More for infrastructure, less for Amtrak
The proposed budget seeks $1 trillion in direct federal spending on infrastructure over the next decade, without saying how it would be paid for. The plan calls for a 10-year, $810 billion reauthorization of highway, rail, transit and other transportation programs in addition to $190 billion in additional infrastructure investments.
Part of the plan would raise contract spending on highway and transit projects by the Highway Trust Fund and eliminate recent discretionary spending appropriated for those programs. For example, nearly $2.2 billion in discretionary highway and bridge infrastructure appropriations would be cut while the Highway Trust Fund sees a $3.6 billion increase in its contract authority.
Trump frequently rails on the condition of American infrastructure but attempts to secure a viable deal haven’t been successful. Trump’s previous infrastructure plans have sought to use taxpayer funds to leverage private sector capital for the bulk of spending on roads, bridges, tunnels and other public assets, while Democrats favor direct federal spending. Talks between the White House and congressional Democrats 2018 on an infrastructure bill failed to produce a deal.
Other discretionary cuts target Amtrak, which would see grants slashed to $936 million from $2 billion in fiscal 2020 as part of a proposed restructuring that would eventually revamp the railroad’s poor-performing long distance routes, replacing them with short-distance service in key corridors.
Trump seeks to remove tobacco oversight from FDA
The Trump administration is proposing to remove tobacco from the Food and Drug Administration’s regulation and create a new agency within the Department of Health and Human Services to oversee the products.
The landmark 2009 Family Smoking Prevention Tobacco Control Act gave the FDA authority to regulate tobacco products after years of lobbying from public health groups and even industry leaders. But one of Trump’s top officials has called regulating tobacco “a huge waste of time” for the FDA.
FDA officials are in the midst of trying to curb a teen vaping epidemic and are months away from a deadline when companies must submit applications to the FDA in order to keep selling their e-cigarettes. The proposal would create a new agency with “a singular mission on tobacco,” allowing it to “have greater capacity to respond strategically to the growing complexity of new tobacco products,” the administration said in a fact sheet.
Plan assumes Congress will extend expiring tax cuts
The budget proposal assumes that Congress will extend tax cuts for individuals and pass-through businesses, which are set to expire at the end of 2025, at an estimated cost of $1.4 trillion over a decade.
However, the budget lets several parts of the Trump’s signature 2017 tax law expire: including an incentive for businesses to invest in equipment, more generous accounting rules for corporations to claim research and development expenses, and lower rates on offshore profits. That’s likely to unleash a wave of lobbying as those benefits begin to phase out.
The budget doesn’t address any new large-scale tax cuts that Trump and his advisers say they plan to roll out ahead of the 2020 election. Trump has promised a new wave of tax cuts focused on the middle class that members of his administration refer to as “Tax Cuts 2.0.” Larry Kudlow, Trump’s top economic adviser, has said the plan will be released later in the summer for Republicans to use as they campaign in the fall.
Trump seeks national uranium reserve for power plants
The budget request seeks $150 million for the creation of a national uranium reserve — a move that could be a boon to domestic uranium miners such as Ur-Energy Inc. and Energy Fuels Inc.
The reserve is needed to “provide additional assurances of availability of uranium in the event of a market disruption,” the White House said in its budget.
It comes after Trump rejected a market quota for foreign uranium imports sought by domestic miners and instead formed a presidentially appointed working group to analyze other options. The creation of a domestic reserve through purchases by the Energy and Defense departments was one of them.
Energy and environment programs targeted for deep cuts
Trump is proposing deep cuts to the federal government’s work on energy and the environment, including a 26% reduction at the EPA and a 8.1% drop at the Energy Department.
The administration said it wants Congress to “eliminate almost 50 wasteful programs that are outside of EPA’s core mission or duplicative of other efforts,” as part of its $6.7 billion plan for the agency.
The Energy Department, buoyed by recent funding increases, would see its clean energy office cut roughly 70%, as part of an overall $35.4 billion budget. The administration is also asking Congress to spike loan programs for advanced technology vehicles and other initiatives — including one eyed to help revive a former General Motors Co. factory in Ohio.
At the same time, the National Nuclear Security Administration, an Energy Department agency that oversees the nation’s nuclear weapons stockpile, would see a 19% increase. The administration justifies the proposed increase by saying the investments would “extend the life of warheads in the stockpile and modernize the supporting infrastructure.”
Conservationists blasted the president’s budget plan, saying it would put communities at risk while ignoring climate change.
“It is unconscionable to take such drastic cuts to EPA, the Energy Department and other agencies that keep us safe, protect our kids and grow our clean energy economy,” said Natural Resources Defense Council President Gina McCarthy.
—Jennifer A. Dlouhy and Ari Natter
Budget plan would move Secret Service back to Treasury
Trump’s budget calls for the Secret Service to move to the Treasury Department from the Department of Homeland Security, a change DHS officials have previously resisted. The budget proposal says the transfer would “create new efficiencies in the investigation” of financial crimes and “prepare the nation to face the threats of tomorrow.”
Homeland Security, however, would still see an increase. The spending plan calls for $49.7 billion in fiscal year 2021 funding for the agency, $1.6 billion more than it received for 2020 (without Secret Service included). Including the Secret Service, the budget request is $52.1 billion, also a $1.6 billion increase from 2020 spending levels.
The Secret Service, established for the dual purpose of protecting the president and combat currency counterfeiting, was housed inside Treasury until 2003 when it was moved to the newly created Homeland Security department. The Trump administration aims to restore it to Treasury in part to enhance efforts to fight cybercrime, which has grown increasingly complex since crypto-assets entered the international financial marketplace.
Treasury is also home to the Financial Crimes Enforcement Network, or FinCEN.
—Jordan Fabian and Saleha Mohsin
More for wall, detention and border protection
The budget requests $2 billion to build approximately 82 miles of additional wall along the U.S.-Mexico border, down from $8.6 billion requested last year. But the administration says that with spending allocated from 2017 to 2020 plus the new funding, it could pay for the construction of about 1,000 miles. It would also spend $3.1 billion to add 60,000 detention beds each day. Last summer, U.S. Immigration and Customs Enforcement hit an all-time high of 56,000 people in detention.
The administration asks for $182 million to hire 750 more Border Patrol agents plus 300 processing coordinators and support staff. It also requests $544 million to hire an additional 4,636 ICE enforcement officers, immigration court prosecuting attorneys. It would bring ICE staffing total to as many as 6,000 workers.
Budget calls for $30 million for 737 Max-related safety
The White House wants to add $30 million to the Federal Aviation Administration’s budget to strengthen safety in the wake of errors made in how Boeing Co.’s 737 Max was approved.
The budget proposal says the money is designed to “improve aviation oversight, following recommendations from the Boeing 737 Max investigations and reviews.”
The FAA has been under fire for approving a feature on the plane that was linked to two fatal crashes that killed 346 people and led to its grounding.
In the redesign process the agency has refused to delegate any approvals to Boeing employees, who signed off on more than 90% of the original plane. If FAA wants to take a more direct role in assessing aircraft designs, it would need more manpower and technical expertise.
Lawmakers including Representative Peter DeFazio, the chairman of the House Transportation and Infrastructure Committee, have also said they would look for ways to add to FAA’s resources.
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