GOP pleased over Trump budget blueprint

James Marshall
May 24, 2017

The 62-page blueprint from the White House says that the latest budget would invest $2.6 billion in border security, which would include funding "to plan, design and construct a physical wall along the southern border" though it didn't specify exactly how much.

President Donald Trump's first budget proposal got an icy reception on Capitol Hill Tuesday, and that was just from the Republicans. "They're not mere shavings, they're deep, deep cuts".

There also appears to be a dubious calculation regarding how the tax cuts are counted: The plan seems to use the lower taxes championed by Trump to promise stronger growth while also assuming that the tax cuts will boost revenue to shrink the budget gap. Come on, this is the first administration in history - OK? - it was the first decade, the first eight-year period in history not to have a 3 percent growth rate.

The White House is also asking for $1.5 billion to support Trump's efforts to substantially increase detentions and deportations of undocumented immigrants by funding detention and removal efforts.

Rep. Marcy Kaptur (D-Ohio), the ranking member on the House Energy and Water Appropriations Committee, derisively calls Mulvaney a "meat grinder" for his willingness to take an ax to budget programs.

"We are essentially back at full employment", says Douglas Holtz-Eakin, head of the right-leaning American Action Forum and a respected budget analyst.

Instead, the Trump tax plan promises an overhaul that would cut tax rates but rely on erasing tax breaks and economic growth to end up as "revenue neutral".

Mulvaney stressed that the administration had ruled out the likelihood that the economy will grow only about 2 percent annually.

"We reject that pessimism", Mulvaney said at a White House briefing Tuesday.

The CBO projects US economic growth will average almost 1.9 percent over the next decade. And they're not going to address our biggest programs: Social Security and Medicare. As a result, its projections of lower deficits depend on faster growth and trillions of dollars cut from domestic programs.

Said Sen. Bill Cassidy, R-La.: "I don't think the president's budget is going anywhere".

House Speaker Paul Ryan R-Wisconsin, said Trump's budget, like those of his predecessors, will get a heavy reworking in Congress. "Supposedly you can put these different pieces of the puzzle together in a way that you don't touch entitlements". "I'm not a fan of surprises, and you have to set realistic expectations, because there are real trade-offs and choices".

The 1990s were a boom time in part because the baby boomers had entered their peak earning years. That advantage no longer exists. The Trump budget also seeks to curb illegal immigration, which could discourage foreigners - even those with visas - from entering the country and increasing the size of the workforce.

Because of the aging population, Trump can not return the economy to 3 percent growth, said Bill Hoagland, a senior vice president at the Bipartisan Policy Center who formerly served as a Republican aide on the Senate Budget Committee. He said, "Do I expect [Congress] to adopt this 100 percent, wholeheartedly, without any change?" People coming off of government aid are overwhelmingly poor.

Trump, who is traveling overseas and will miss the unveiling of his plan, wants lawmakers to cut $3.6 trillion in government spending over 10 years, balancing the budget by the end of the decade, according to a preview given to reporters on Monday.

All this cutting will permit some tax reductions for entrepreneurs and corporations and that should encourage more investment and greater worker productivity.

The budget will make further requests for immigration enforcement, including $300 million to support recruiting, hiring and training for the vast increase in agents for Customs and Border Protection and Immigration and Customs Enforcement that Trump has called for.

A united Democratic front, combined with some pockets of GOP resistance on specific issues, suggests the Trump budget is unlikely to emerge without significant revisions. It promises a massive tax cut that wouldn't increase the federal deficit, another dubious pledge. Not a top academic economist surveyed this month by the University of Chicago said such a feat was possible given today's economic and demographic circumstances. The plan will have to fight its way through Congress, where Democrats and more liberal Republicans are already balking at plans to cut holes in a social safety net that has been saving down-on-their-luck Americans from penury and worse since Lyndon Johnson was president. This means the federal government can afford losing up to $2.8 trln in tax revenues because of the tax cuts.

Trump is "starting with a growth rate without even saying what the policy is", he said.

Other reports by Click Lancashire

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