White House Races to Rewrite Budget as Lawmakers Boost Spending

• February 09 2018
• Erik Wasson

President Donald Trump’s next budget is being rewritten at the last minute to make sure it’s not entirely out-of-date even before it hits a single desk in Congress.

President Donald Trump’s next budget is being rewritten at the last minute to make sure it’s not entirely out-of-date even before it hits a single desk in Congress.

The changes are being made in response to a two-year budget deal passed by lawmakers early Friday that boosts spending caps by $300 billion, providing $90 billion in emergency disaster aid, and a raft of tax benefits and incentives for the energy industry. The Trump budget, due Monday, had been drafted assuming much lower levels of spending. 

Among changes planned by the administration, the president’s budget will have new guidance about how to pay for the spending increase and how to allocate the extra discretionary money to Trump priorities, according to a White House Office of Management and Budget statement. 

Even with the changes, the White House will struggle to make the president’s fiscal 2019 spending blueprint relevant since it will likely propose major spending cuts that get sidetracked by the distraction of congressional elections less than eight months away.

“Unlike last year, Congress isn’t anxious to get started on a big new initiative such as Obamacare repeal or tax cuts,” said Bob Bixby of the Concord Coalition, a non-partisan anti-deficit group. “In fact, there is every reason to believe that Congress won’t even bother doing a budget this year, so what the president has to say about the budget is of less interest.”

Priority Lists

Over the last several administrations, Congress has treated presidential budgets as mostly aspirational listings of priorities rather than firm guidelines for the appropriation process. Last year, Trump proposed cutting domestic discretionary spending by $54 billion in 2018,
including 30 percent cuts to the State Department and the Environmental Protection Agency.

Congress ignored those requests. In fact, the budget deal permits an increase of $143 billion in fiscal 2018 discretionary spending to $1.29 trillion and an increase of $153 billion to $1.32 trillion in fiscal 2019.

The White House formally backed Congress’s plan even though it said the deal "provides non-defense discretionary spending levels higher than the Administration deems necessary."

The Pentagon is one area where Trump’s budget didn’t need to be updated. The document is set to call for $716 billion in total defense spending in 2019, the same amount in the budget deal. The increased level represents a victory for Defense Secretary Jim Mattis over Budget Director Mick Mulvaney, who in the 2018 budget called for holding defense spending flat over a decade.

The budget may influence the detailed program-level decisions that the congressional appropriations committees make in fleshing out the two-year deal. The spending panels plan to produce a giant omnibus package allocating the new spending by March 23.

‘Strange Time’

"Obviously the big issue is establishing the top line," said Republican Senator Bob Corker of Tennessee, a deficit hawk. "You have sub-elements that might affect an omnibus."

“We are living is a strange time right now when it comes to spending," he added.

The document is also widely expected to use optimistic economic growth assumptions to claim to balance within 10 years.

“Under any credible test, the deficit numbers will look worse than last year and the gimmicks used to assume them away will be greater," Bixby said.

Marc Goldwein of the Committee for a Responsible Federal Budget said that Trump’s last budget claimed a tax overhaul would increase revenues by $2 trillion in the following decade. The official congressional score of the tax bill which passed last year says it would cost $1 trillion in revenue, even with economic growth factored in.

Romina Boccia, a budget specialist with the conservative Heritage Foundation, said she expects the budget will claim strong economic growth resulting from cutting regulations and changes to welfare programs, on top of the macroeconomic effects of the tax law.

"I expect they will project 10-year balance, following the administration’s budget from last year," she said, adding that the White House may have to use some gimmicks. "Without reform of the major entitlements -- Medicare and Social Security -- I predict we’ll see some magic wand hand-waving to close the deficit gap in year 10."

Seeking Cuts

The budget is expected to call for cuts to Medicaid and welfare programs and to food stamps, which are governed by a farm bill that’s up for renewal this year. It will also include a $1.5 trillion infrastructure proposal and may try to chip away more at Obamacare.

"Congress and the administration have three legislative priorities for 2018, which are infrastructure, welfare reform, and the farm bill,” Boccia said. “The president’s budget can set the stage for negotiations in these key priority areas, as well as provide guidance to appropriators who’ll be distributing the additional funding agreed to in the budget deal over the next few weeks."

The Trump entitlement cuts and infrastructure plans face major hurdles, however.

Democrats have no interest in the cuts or in another try at repealing Obamacare. Neither does Senate Majority Leader Mitch McConnell of Kentucky, who has made clear he doesn’t want -- and probably wouldn’t be able -- to force purely partisan votes through the Senate with a narrow Republican majority.

Trump is expected to unveil a plan that would spend $200 billion on infrastructure while relying on the private sector to come up with $1.3 trillion. Democrats have said the plan provides too little direct spending while fiscal conservatives are wary.