5 Things to Watch in President Trump’s Skinny Budget

by Harry Stein and Scott Nathan –

President Donald Trump is preparing to release the first budget proposal of his administration. While this budget likely will only provide limited details on President Trump’s plans—thus why it is nicknamed the “skinny budget”—it will still give the American people a clear look at Trump’s policy agenda and the priorities of his new administration.

The skinny budget will not address taxes, and it will only address discretionary spending, the programs that Congress funds in annual appropriation bills. Discretionary spending comprises about one-third of federal spending, and it does not include major programs such as Social Security, Medicare, and Medicaid.

In fiscal year 2018, after a two-year hiatus as a result of the 2015 budget deal, discretionary programs will once again be threatened by harsh spending caps known as sequestration. In the past, lawmakers have passed temporary bipartisan budget agreements to provide equal increases for defense and nondefense programs, recognizing that the sequestration caps are too low for both defense and nondefense. But President Trump’s skinny budget reportedly proposes to increase defense spending by cutting nondefense programs by $54 billion, slashing them beyond the sequestration levels that are already too low. Further cuts will be necessary to fund other priorities of this administration, such as the border wall and harsher immigration enforcement.

The skinny budget should show how President Trump proposes to allocate these massive cuts. These details will help answer the following five questions about the Trump agenda in order to determine whether President Trump is trying to help ordinary Americans or using government to advance the narrow interests of powerful elites:

  • Does the budget protect basic living standards for American families?
  • Does the budget create good jobs?
  • Does the budget ensure a level playing field?
  • Does the budget launch partisan attacks on American democracy?
  • Does the budget make Americans safer?

Does the budget protect basic living standards for American families?

The administration’s proposed cuts to nondefense discretionary spending would touch on programs and services that many Americans turn to every day. Everything would be under threat, from Head Start for young kids, Meals on Wheels for seniors, and legal services for low-income families to post offices and funding for victims of domestic violence.

While not all of the cuts in the Trump budget are known, early reports indicate that some of the worst ones will fall on affordable housing programs that help provide a decent place to live for struggling families. In its previous budget request for fiscal year 2017, the U.S. Department of Housing and Urban Development, or HUD, reported a massive backlog of more than $26 billion in needed capital investments to sustain the nation’s public housing. More than half of the 1.1 million households living in public housing are headed by a senior citizen on a fixed income or a person with disabilities, and further deterioration of public housing may leave many of these families homeless. Despite this growing need to invest in public housing, President Trump is reportedly planning deep cuts to the public housing capital fund, which HUD describes as “the principal source of federal funds to preserve public housing.”

Furthermore, the Trump budget may also fail to provide adequate funding to maintain existing rental assistance vouchers for low-income families. Even flat funding for rental assistance programs would be insufficient to sustain existing vouchers because housing costs increase due to factors such as inflation. Yet the Trump budget may compound this problem by reducing funds for rental assistance vouchers, and early estimates indicate that these cuts may take vouchers away from hundreds of thousands of families.

At a time when lack of funding means that only 1 in 4 eligible low-income families receives housing assistance, the question should be how to increase support for affordable housing, not how to cut it. For low-income families struggling to climb into the middle class, the loss of affordable housing could mean that family breadwinners cannot get to their jobs or that students miss school. The first question to ask about the Trump budget is whether it works to protect basic living standards or whether it will just make things worse for families that are already on the brink.

Does the budget create good jobs?

Despite President Trump’s rhetoric about creating jobs by increasing infrastructure investment, it appears that his budget will instead include deep cuts to many of the nation’s major infrastructure programs. Two major federal water infrastructure programs are funded by the Environmental Protection Agency, or EPA, which may be subject to massive cuts under the Trump budget. These programs are the Clean Water State Revolving Fund, which is primarily for wastewater management, and the Drinking Water State Revolving Fund, which helps to make tap water safe to drink. The American Society of Civil Engineers grades America’s wastewater infrastructure as a D+ and drinking water infrastructure as a D. EPA cuts may also reduce investment in the Brownfields Program, which cleans up contaminated areas to make them safe and productive again.

Infrastructure projects could also be eliminated through cuts to the HUD budget, such as the locally driven investments to revitalize communities that are funded by Community Development Block Grants. And with such large overall cuts to the nondefense discretionary budget, even the infrastructure programs at the U.S. Department of Transportation may be at risk.

Additionally, federal job training programs may see substantial cuts in the Trump budget. These programs were recently reformed and reauthorized on a bipartisan basis by the Workforce Innovation and Opportunity Act, or WIOA; according to the U.S. Department of Labor, they serve more than 23 million workers. In 2014, WIOA passed the House of Representatives by a vote of 415-6 and passed the Senate by a vote of 95-3. Many of the elected officials who supported WIOA are still in Congress, and it would be the height of hypocrisy and a betrayal of workers for those elected officials to cut the same job training programs that they supported just three years ago.

Does the budget ensure a level playing field?

President Trump campaigned on the promise to “drain the swamp.” He said that his decisions would be free from the influence of special interests or corporate elites. It isn’t just how he has populated his administration that calls his promise into question: Look who benefits from his budget proposals. Cuts at the EPA are likely to gut the EPA enforcement program. This is a boon for polluters. Less money means fewer inspectors, fewer enforcements, and continuing harm to human health and the environment. The right to dirty our air and water shouldn’t be payback for polluters’ financial support of politicians. With the new EPA administrator now publicly questioning whether carbon dioxide even contributes to global climate change, the lines of attack are clear and tilt toward corporate polluters.

What about the IRS? The target of perennial attacks by Republicans in Congress, the IRS has been under siege for years. Since 2010, the IRS budget is down 17 percent, and overall staff numbers are down 14 percent. It appears that the situation is about to get worse, with even more severe cuts likely in Trump’s budget. In what becomes a self-fulfilling prophecy, funds for customer service are choked off, and then criticism of faltering service levels is used as the pretext for cutting funding even further. Cybersecurity needs go unmet, and the risk to taxpayer data rises. And in what has been described as a tax cut for cheats and frauds, the IRS’ enforcement budget—already far below where it should be—is likely to be cut further. The enforcement staff is down 23 percent since 2010, causing sharp declines in the number of audits of high-income taxpayers and businesses and a falloff in the number of criminal cases and convictions. Not only is this unfair, but it doesn’t even make economic sense. The decreasing amount of staff is leaving billions of dollars uncollected each year because fewer agents are doing fewer audits. Furthermore, given that the president has consistently rejected calls to release his tax returns to the public by using the pretext of being “under audit,” it seems an especially awkward time to cut that function even more deeply.

Does the budget launch partisan attacks on American democracy?

Voting rights, access to the ballot, and full and fair representation are key democratic pillars. The budget will reveal how much this new administration cares about supporting and protecting these key American values. Will the Civil Rights Division of the U.S. Department of Justice be able to pursue its mission in the face of budget cuts? What about programs that protect the integrity of U.S. elections?

And does the budget make the investments necessary to support the mission of the U.S. Census Bureau—to count everyone in the United States once, and only once, and to locate them in the right place? Not only is the census one of the country’s oldest government programs, mandated specifically by the Constitution to be carried out every 10 years, but also, how it is carried out has far-reaching implications for the U.S. political system. It shapes Americans’ representation by determining the basis for redistricting in the House, and the data collected provides the bedrock for decisions about resource and program allocations. Failure to properly administer the census could undermine our democracy and the fairness of our system. Ensuring an accurate count requires planning, testing, and investment in technology and staff. All of this depends on funding the current plan. Insufficient annual appropriations would undermine investments to realize efficiencies and would jeopardize billions of dollars in cost savings and, worse, the accuracy of the data collected and the fairness of the result.

Does the budget make Americans safer?

While most of the details of the skinny budget have come to light only because of leaks and rumors, increasing the defense budget by $54 billion has been trumpeted from the beginning of the process. But Center for American Progress Senior Fellow Lawrence Korb, who served as assistant secretary of defense for President Ronald Reagan, writes that increasing military spending does not actually solve the real national security challenges currently facing the United States. The American military is already extremely strong, with the United States spending more on defense than the next seven nations put together. The Trump administration may even propose paying for this defense buildup with cuts to diplomatic and foreign assistance programs. But Trump’s own secretary of defense, James Mattis, has previously said that these kinds of cuts would make the United States less safe and increase the likelihood of future conflict.

These proposals would force painful trade-offs that would cause real damage to people, fairness, and the U.S. system of governance. Some of those trade-offs could also lead to cuts to programs that clearly make Americans safer. More aggressive immigration enforcement, building out detention capacity, and even paying for a border wall would undoubtedly mean big spending increases at the U.S. Department of Homeland Security. But it would in turn force cuts to some of the other critical components of the department that are less obviously connected to Trump’s anti-immigrant agenda but that are no less important for protecting the public. For example, these cuts could mean increased pressure on the TSA work force and less investment in critical equipment to protect travelers. It could also mean less funding for the Federal Emergency Management Agency’s disaster relief mission, undermining the efforts of local first responders to save lives and to provide vital aid and recovery assistance.

Protecting the public is not just about fending off national security threats. Will the American public be safer if funds for modernizing and operating the Federal Aviation Administration are slashed? Can we afford to underfund safety oversight of our roads, rails, and public transit systems? What about clean food and safe drugs? Cutbacks, hiring freezes, and furloughs in these programs put Americans’ health and safety at risk.

Conclusion

Programs funded out of the nondefense discretionary budget protect basic living standards, create jobs, level the playing field, safeguard our democracy, and increase our national security. The caps imposed by sequestration are already too low to support these critical functions. Therefore, Congress will need to negotiate another bipartisan budget deal that provides equal increases for defense and nondefense programs—such as the agreements passed in 2013 and 2015.

The skinny budget will not have all of the details of President Trump’s agenda, but it should provide an early indication of how—and for whom—the new administration will govern. When the Trump budget comes out, look at the details and ask what they mean for basic American values and the well-being of working families.

Harry Stein is the Director of Fiscal Policy at the Center for American Progress. Scott Nathan is a Senior Fellow at the Center.

Reprinted with permission from The Center for American Progress