Trump presents election-year budget

Updated 12 Feb 2020

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Washington: Staff from the House Budget Committee handle copies of US President Donald Trump’s FY2021 budget proposal that were placed on display for the news media on Monday.—Reuters
Washington: Staff from the House Budget Committee handle copies of US President Donald Trump’s FY2021 budget proposal that were placed on display for the news media on Monday.—Reuters

WASHINGTON: With months left before US elections, President Donald Trump unveiled a budget roadmap on Monday that abandons key deficit cutting promises based on lofty and unlikely economic growth assumptions.

The final spending plan of Trump’s first term in office faces near certain defeat in the Democrat-controlled House of Representatives, but offers a window into the administration’s priorities.

The budget makes cuts to social programmes, environmental protections and foreign assistance, to fund higher defence spending and extend tax cuts for wealthy individuals and companies, according to officials and multiple US media reports.

The proposal again abandons the stated goal of closing the budget deficit in 10 years, instead pushing the target date back to 2035.

However, even that extended timeline assumes the US economy will grow by 3.0 percent a year or close to it through 2030, which would support higher tax revenues, something not achieved consistently in over a decade, and unheard of for an economy after 11 consecutive years of growth.

Despite pledging to pursue the Republicans’ long-held war on deficits, the Trump administration has shown little interest in tackling the issue, with the gap expected to hit $1 trillion this year amid growing government debt – double the estimate in his first budget.

The $4.8tr spending proposal for this year calls for $2tr in cuts to non-defence programmes, including safety nets such as food stamps, and savings from the Medicare prescription drug coverage.

Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, offered praise for some of the policies in the budget but called for serious action to reduce deficits.

“We don’t need more false promises about rapid economic growth or tax cuts that will pay for themselves.

We need action to reverse our trillion-dollar deficits, save our largest trust funds, and prevent debt from reaching new record highs,” she said in a statement.

Published in Dawn, February 11th, 2020