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Trump’s $4.4 Trillion Budget Request: What You Need to Know

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The Trump administration’s $4.4 trillion budget request for fiscal 2019 seeks to slash spending on domestic programs for energy research, arts and humanities and even some major infrastructure initiatives, even after caps on non-defense spending were raised last week.

The proposal calls for $540 billion in non-military discretionary spending, shy of the $597 billion limit for the year starting Oct. 1 that Congress passed last week as part of the Bipartisan Budget Act (Public Law 115-123). Those numbers are reflected in an addendum to President Donald Trump’s request. Before the adjustment, the request had called for only about $465 billion in non-defense funds.

For defense, the budget request calls for a total of $716 billion, using emergency Overseas Contingency Operations funds to surpass the $647 billion limit.

Officials had to update the document, which calls for $4.4 trillion in outlays, to acknowledge Congress’s move on Friday to raise spending caps under the 2011 Budget Control Act (Public Law 112-25) by $85 billion for defense and $68 billion for non-defense funds in fiscal 2019. The request calls for $1.199 trillion in discretionary budget authority.

Trump’s request got immediate pushback from Democrats. “This president does not prioritize fiscal sustainability; middle class workers and their families; investments in our economy; or stable, long-term funding certainty for our military and national security agencies,” House Minority Whip Steny Hoyer (D-Md.) said in a statement. In the Senate, a fiscal 2019 omnibus spending bill will require bipartisan support and 60 votes.

The request estimates that the gross national debt will be $22.7 trillion at the end of fiscal 2019. It anticipates the unemployment rate will drop to 3.7 percent in 2019, and that gross domestic product growth will hit 3.2 percent that year.

Major Cuts

The request calls for the elimination of the Department of Housing and Urban Development’s Community Development Block Grant program, for which lawmakers just appropriated an additional $28 billion in the wake of last year’s hurricane season. It also seeks to eliminate the Transportation Investment Generating Economic Recovery (TIGER) grants, despite the administration calling for a boost in infrastructure funds.

Requested eliminations include:

  • ARPA-E
  • HUD Community Development Block Grants
  • TIGER Grants
  • Advanced Technology Vehicle Manufacturing Program
  • Weatherization Assistance Program
  • Title 17 Innovative Technology Loan Guarantee Program
  • Legal Services Corp.
  • National Endowment for the Humanities
  • National Endowment for the Arts
  • Chemical Safety Board.

The Corporation for Public Broadcasting would be cut to $15 million, compared with $495 million in fiscal 2017. The U.S. Institute of Peace would be cut to $20 million, down from $38 million in fiscal 2017.

The budget proposal’s infrastructure plan includes $200 billion for infrastructure in the hopes of spurring a total of $1.5 trillion in investments including state, local and private funds.

The federal figure includes:

  • $100 billion for an incentive program to attract non-federal funds, administered by the Department of Transportation, the Army Corps of Engineers and the EPA.
  • $50 billion for rural infrastructure.
  • $20 billion for “fundamentally transform the way infrastructure is delivered or operated,” administered by the Commerce Department.
  • $20 billion set aside to “advance major, complex infrastructure projects” by expanding existing federal credit programs, such as: the Transportation Infrastructure Finance and Innovation Act, the Railroad Rehabilitation and Improvement Financing, the Water Infrastructure Finance and Innovation Act, the Rural Utilities Service lending program and Private Activity Bonds.
  • $10 billion for a federal capital financing fund

CHIMPS Reversals

In some cases, the administration hopes to use the higher discretionary spending caps to undo “longstanding budget gimmicks” referred to as changes in mandatory programs. CHIMPS lower the amount of discretionary spending, but don’t actually lead to a decrease in government outlays. The administration’s addendum calls for $17.7 billion in non-defense discretionary funds to almost entirely eliminate the use of CHIMPS in appropriations bills.

In some cases, the addendum also looks to shift funds that were classified as emergency Overseas Contingency Operations funds into the base budget for the Department of Defense and the State Department.

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The post Trump’s $4.4 Trillion Budget Request: What You Need to Know appeared first on Bloomberg Government.

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