Yesterday President Trump released his budget for FY 2019, set to begin in October. The new budget forgoes previous Republican budgets’ attempts to eliminate the deficit.
Office of Management and Budget (OMB) Chairman Mick Mulvaney said that they had to make some alterations to take into account the recently passed bipartisan spending bill, which broke the 2011 Budget Control Act (BCA) caps and increased non-defense discretionary spending by $63 billion.
In total, the President’s budget would add $7 trillion of new debt over a 10 year window. Complicating fiscal conservatives concerns over the return of yearly trillion dollar deficits, that estimate relies on an average of 3% GDP growth per year, which has not occurred since the ’90’s.
In a shift of policy, the President would curtail the growth of entitlement programs. Medicaid would be supplemented by the creation of a “market-based healthcare grant”, which would lower spending by $250 billion over 10 years, while Medicare would see a $554 reduction, with $47 billion coming from reforming prescription drug pricing.
The Pentagon would see the most significant shift from Trump’s previous budget request, with the President calling for $716 billion. This increase would be offset with across-the-board cuts to domestic spending. A “2 penny rule” would be applied to most domestic programs, which would decrease their budget by 2% a year, saving taxpayers $1.5 trillion over the next 10 years in the process.
Over the next two years, President Trump would reserve $18 billion for border security , while proposing cuts to federal education aid and slashing all federal funding for public media.
While acknowledging the high levels of spending, Mulvaney declared, ““You don’t have to spend all of this money, Congress. But if you do, here’s how we would prefer you spend it.”