Budget items being leaked
The Trump budget details have been trickling in the head line news feed. Some details:
- $4.8T budget for the upcoming fiscal year
- proposes more funding for defense to the tune of $740.5 billion dollars, including the creation of the Space Force.
- it would bring steep cuts to social programs despite almost 1 trillion deficit spending
- he proposes cuts in discretionary spending by 5% ($-590 billion) including reductions in foreign aid and the environmental protection programs. He also will require new work requirements on welfare programs such as food stamps and housing assistance.
- The deficit with decline to $966 billion next year which is below the 1 trillion projected by nonpartisan Congressional Budget Office.
- Total debt held by the public's approaching $18 trillion end is expected to reach $31 trillion by 2031
- the budget includes a savings of $135 billion in drug pricing reform,a $292 billion savings from adding working requirements to welfare programs, $170 billion from changing student loan laws, $70 billion from reforming disability programs, and $266 billion from site neutrality rules that would see the government pay the same amount for medical services whether they are performed in the hospital or a doctor's office
- the budget proposes $2 billion for the border wall with Mexico. That is down from $8.6 billion requested a year ago
- the budget calls for $1 trillion for infrastructure spending. $810 billion would be reauthorization of highway, rail, transit and other transportation programs. 190 billion would be in additional infrastructure investments
- it assumes that the economy will grow 3.1% in the 4th quarter 2020 which is above what most economists and analysts (including the Fed) project
- they also project that the growth rate over the coming years will be 3% as well, with growth only cooling toward the end of the decade.
- The project the 10 year yield will average 2% in 2020 (the 10 year is currently at 1.5696%
- the budget also assumes that the Presidents tax cuts that are set to expire in 2025 will be extended
- negotiated trade deals will be on better terms for the US
- proposes selling 15 million barrels from US oil reserves
- the budget would add $5.6 trillion in deficits over 10 years
- proposes 36 billion in cuts over the next decade to farm subsidy program including federal funding for crop insurance, conservation and commodity programs
The Presidents budget is on the surface just an idea, but does not have much ending power. Spending is appropriate by Congress and with a split Congress it is unlikely that his ideas would be fully implemented. In fact the lawmakers are expected to finish work on the 2021 spending until after the November elections.