President Trump on Tuesday will propose cutting federal spending by $3.6 trillion over 10 years, a historic budget contraction that would severely ratchet back spending across dozens of programs and could completely reshape government assistance to the poor.
The White House’s $4.094 trillion budget request for fiscal 2018 calls for cuts that hit Medicaid, food assistance and other anti-poverty programs. It would cut funding for the Children’s Health Insurance Program (CHIP), which provides benefits to the poor, by roughly 20 percent next year.
All told, the budget would reduce spending on safety-net programs by more than $1 trillion over 10 years.
Details of the budget circulating in Washington on Monday drew outrage from Democrats and a mix of anxiety and praise from Republicans, illustrating the political minefield that policymakers face as they debate whether to turn the proposals into law.
Mick Mulvaney, director of the Office of Management and Budget, said the spending plan, titled “A New Foundation for American Greatness,” is focused on protecting taxpayer money and cutting spending on programs that are ineffective or encourage people not to work.
He singled out the Supplemental Nutrition Assistance Program (SNAP), the modern version of food stamps, which grew rapidly after the financial crisis and had 44 million beneficiaries in 2016.
“We need people to go to work,” Mulvaney said. “If you are on food stamps and you are able-bodied, we need you to go to work. If you are on disability insurance and you are not supposed to be, you are not truly disabled, we need you to go back to work. We need everybody pulling in the same direction.”
Democrats and anti-poverty advocates decried the changes, saying that Trump is seeking to strip support for the most vulnerable Americans while cutting taxes for the wealthiest.
“This would pull the rug out from so many Americans who need help: those suffering from opioid and heroin addiction, people in nursing homes and their families who care for them, the elderly, the disabled and children,” Senate Minority Leader Charles E. Schumer (D-N.Y.) said.
The proposed budget refocuses decades of U.S. spending — both foreign and domestic — to reflect Trump’s belief that too much taxpayer money is simply given away.
For example, the president will propose changing foreign aid programs in a way that no longer delivers much of the money as grants and instead extends loans to foreign governments that must be repaid, Mulvaney said. Special exemptions would be made for Israel and Egypt.
The budget would also impose a 2 percent cut to all spending that must be approved by Congress each year for the next decade, excluding military programs. Spending for these programs tends to increase each year under Democrats and Republicans. Separately, the budget would eliminate all federal support for Planned Parenthood, the health-care provider that conservatives often attack.
In writing the budget, White House officials were forced to walk a tightrope.
Trump insisted that they could not cut retirement benefits for Social Security or health benefits for Medicare, two of the most expensive parts of the federal budget. White House officials also were committed to protecting military spending.
To preserve those items and eliminate the budget deficit over 10 years, officials had to deliver major cuts across the rest of the budget. The budget also relies heavily on assumptions that economic growth will soar under tax cuts and regulatory reductions that Trump has promised to deliver.
“You have to understand that for Trump, growth is populism, so he doesn’t see this as a budget of cuts but a budget for growth,” said Sam Nunberg, a longtime Trump associate who worked on his campaign in 2015. “What he’s trying to do is work with Congress, where a lot of these ideas started, and put something together.”
The budget, in its deeply conservative framework, risks alarming some of the president’s supporters.
“I’m not sure the White House understands who their base is,” Patrick H. Caddell, a veteran strategist who works with Breitbart News, said. He cited Democrats and working-class independents as key parts of Trump’s political coalition. “Where’s the outreach to them?” he asked.
But a White House official, who was not authorized to speak publicly, said Trump saw the shrinking of the “welfare state” as a necessary component of his nationalist, working-class appeal and part of his pledge to “drain the swamp.”
Meanwhile, Trump’s critics in the GOP shrugged at the president’s overture to the budget-
cutting wing of the party.
“I don’t take it as a sign he’s more ideological,” said Peter Wehner, a veteran Republican policy hand. “He’s like a needle spinning around a broken compass, and we’re not sure where he’ll land. This week he’s more ideological, next week he could be less ideological.”
One of the biggest surprises in the budget is that defense spending remains relatively flat, after months of promises from Trump that he would completely rebuild the military.
The plan proposes a $43 billion increase in defense spending next year, but in subsequent years the budget is almost identical to what it would be without any changes. A White House official said that is because the military is still planning spending priorities for those years and that the budget would eventually change.
For anti-poverty programs, the White House proposes shifting some of the financial costs to states, giving them a financial stake in deciding whether to permit people to receive benefits.
On Medicaid, Trump wants states to choose between agreeing to a cap based on how many people are enrolled or a “block grant” structure that delivers funds to states and gives them more flexibility in how it is spent.
A number of key Republicans have expressed concern about the approach.
Even some congressional conservatives warned that there is such a thing as too many cuts. “There will be some concerns if we go too deep in some of these areas,” said Rep. Mark Walker (R-N.C.), chairman of the Republican Study Committee, referring to the cuts to the children’s health care program.
Rep. Mark Meadows (R-N.C.), chairman of the hard-line House Freedom Caucus, said he was encouraged by early reports of new curbs on SNAP and other spending, but said he drew the line on cuts to Meals on Wheels — a charity that Mulvaney suggested was ineffective earlier this year.
“I’ve delivered meals to a lot of people that perhaps it’s their only hot meal of the day,” Meadows said. “And so I’m sure there’s going to be some give and take, but to throw out the entire budget just because you disagree with some of the principles would be inappropriate.”
On Medicaid, Trump wants to transform the way the program’s funding works, moving away from its half-century history of giving each state a certain share of the program’s cost, no matter how many are on the rolls. Instead, the administration is proposing to give states a choice between a financial cap based on how many people are enrolled or a “block grant” that would allow more latitude over how the money were spent. Three health-policy experts said Monday night that the block grants envisioned in the budget would go beyond those that would be allowed under the American Health Care Act, which narrowly passed the House last month.
The administration wants to allow a state to move everyone on Medicaid into a block-grant system, while the House bill would not permit that for elderly or disabled people, who tend to have the highest Medicaid expenses
For SNAP, the White House is proposing changes that would force states to pay a portion of the benefits, which could put more pressure on them to prevent people from enrolling.
On CHIP, the White House would propose eliminating a 23 percentage point increase in federal contributions and would cap other assistance to the program to limit federal payments to children from families with incomes of no higher than 250 percent of the federal poverty level. The White House contends that would make sure the program helps only the neediest children.
However, Diane Rowland, executive vice president of the Kaiser Family Foundation, pointed out that 18 states, plus the District of Columbia allow the children of families with incomes of more than 300 percent of the poverty line into their programs. For such states, Rowland said, “this is a big hit.”
“We are no longer going to measure compassion by the number of programs or the number of people on those programs,” Mulvaney said. “We are going to measure compassion and success by the number of people we help get off of those programs and get back in charge of their own lives.”
But Jared Bernstein, who served as a top economic adviser to former vice president Joe Biden, called the scale of Trump’s cuts “otherworldly.” He said that even if Senate Republicans are able to scale back the cuts, they could still have a major impact on government programs.
“At the end of the day, they may settle for something that’s huge and egregious but less than the cosmic number they are throwing around” in the budget proposal, he said.
Many of the programs targeted by Trump’s budget provide health, housing or other assistance to millions of Americans, including a large number of Trump voters.
There are 74.6 million Americans who receive Medicaid or CHIP, according to the Kaiser Family Foundation. Almost 11 million receive Social Security Disability Insurance payments, and 8.3 million receive Supplemental Security Income, a small cash benefit for the poor and those with disabilities.
Many of these programs have rigorous screening mechanisms, and it is very difficult for people who are unemployed, childless and able to work to collect benefits for long. But Trump administration officials believe the rules should be even stricter, with the goal of pushing more people back into the workforce so that the economy can strengthen and create more growth.
Former House speaker Newt Gingrich, who engaged in numerous budget battles during the Clinton administration, said that Trump must steel himself against attacks and emphasize his insistence on how much he “values work.”
“If the Trump people sell it as genuine reform that’s getting rid of people who should be at work or are cheating, getting rid of redundancy and making the bureaucracy dramatically leaner, then it will be successful,” Gingrich said. “People actually resent neighbors who are getting goodies they haven’t worked for. It’s going to be a huge fight. How this plays out will depend on how he handles it.”
