Trump proposes massive cuts to Medicare, EPA and more

Arturo Kim
March 13, 2019

On Monday, the 11th of March 2019, the US President Donald Trump would be asking US Congress an additional amount of $8,600 for funding the wall he promised to build over the southern border with Mexico, White House officials familiar with the 2020 US budget bill revealed on Sunday (March 10th).

House Budget Committee Chairman John Yarmuth said House Democrats would put out their own budget proposal around the first week of April and that he hoped for a deal with the Senate. Another $845 billion would be slashed from Medicare by slashing reimbursements to hospitals and other health care providers and eliminating "waste, fraud and abuse".

President Trump's budget would largely skip the hard work of cutting entitlement spending, the biggest driver of federal debt, instead proposing to slow the growth of payments to Medicare providers and leaving Social Security untouched.

In fact, the only way you end up with anything approximating balanced budgets, even with some of these draconian cuts, is by making delusional predictions about economic growth. House Speaker Nancy Pelosi called his cuts "cruel and shortsighted ... a roadmap to a sicker, weaker America".

After requesting $5.7 billion past year for barriers on the southern border, which Congress mostly rejected, the president is asking for $8.6 billion in fiscal 2020. It also envisions budget deficits topping $1 trillion from 2020 through 2022. In February 2018, the White House reversed the massive cuts it had proposed to science agencies in 2019 at the last minute, after Congress raised funding caps for non-defence spending.

"The room to maneuver is shrinking because the vast majority of USA government spending goes toward entitlements and not discretionary spending", wrote Torsten Slok, chief global economist at Deutsche Bank in a note to clients that included the chart below.

"President Trump has somehow managed to produce a budget request even more untethered from reality than his past two,"said Democratic Representative Nita Lowey, chairwoman of the House Appropriations Committee".

Office of Management and Budget Acting Director Russ Vought added that Trump's budget "reflects the president's priorities to ensure that all Americans can benefit from the nation's historic economic boom and record-low unemployment".

Despite the large projected deficits, Vought said the administration has "prioritized reining in reckless Washington spending" and shows "we can return to fiscal sanity".

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The entirety of the president's 2020 budget request will be made available to the public on Monday. "Taxpayers First", Trump's was panned by some fiscal watchdogs as more piling on of debt by Trump with no course correction in sight.

"Just as a general matter, most Americans support the idea of expecting people receiving government assistance to do what they can to support themselves", said Matt Weidinger, a resident fellow at the Center for a Responsible Federal Budget who worked for Republicans on the House Ways and Means Committee for decades. She warned the debt load will lead to slower income growth and stalled opportunities for Americans.

Trump's declaration would let him divert more than $6 billion from DOD programs to build his border wall: $2.5 billion from the Pentagon's drug interdiction program, and $3.6 billion from its construction projects.

Combined, net Medicare and Medicaid cuts would total more than $1 trillion through 2029.

On Capitol Hill, the budget landed without much fanfare from Trump's GOP allies.

"Many of the architects of his original proposal are no longer in the administration", said Feigenbaum, meaning the White House could have "folks with a different list of priorities that are not as strictly free market as they once were".

The plan sticks to budget caps that both parties have routinely broken in recent years.

"I am pleased the president's budget proposal continues the opioid treatment funding Senator Hassan and I helped secure", U.S. Sen.

Trump's budget proposal also includes $750 million to establish a paid parental leave program and $1 billion for a one-time fund to help underserved populations and encourage company investment in child-care.

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