White House Proposes Deep Cuts To Safety Nets With 'Taxpayer First' Budget Plan

May 23, 2017
Originally published on May 23, 2017 3:02 pm

Updated at 3:02 p.m. ET.

The Trump administration says it can balance the federal budget within a decade. Its proposal calls for significant cuts to social safety net programs and assumes more robust economic growth.

The administration released what it calls a "Taxpayer First" budget on Tuesday.

"This is, I think, the first time in a long time that an administration has written a budget through the eyes of the people who are actually paying the taxes," White House Budget Director Mick Mulvaney told reporters in a briefing on Monday.

The plan was crafted with a skeptical eye toward programs that serve the needy. Over a decade, it calls for hundreds of billions of dollars in cuts to Medicaid, food stamps and disability benefits.

"We are not kicking anybody off of any program who really needs it," Mulvaney said on Tuesday. "We have plenty of money in this country to take care of the people who need help. We don't have enough money to take care of people, everybody who doesn't need help."

He argued that areas that the White House plans to put more resources — national security, law enforcement, paid parental leave — were campaign promises. "And that's why I say these numbers are simply the president's policies put on pager."

Critics call the spending blueprint "Robin Hood in reverse."

"The president is essentially abandoning many people the economy has left behind — a large number of whom voted for him — and is pursuing policies that would make their lives more difficult than they already are," said Robert Greenstein, president of the left-leaning Center on Budget and Policy Priorities.

Two months ago, the White House released a preliminary budget that covered only "discretionary" spending — those parts of the government that Congress has to authorize every year. The new budget also covers "mandatory" spending, including such big-ticket items as Medicare and Social Security.

Some of the proposed cuts to programs like Social Security's disability benefits are designed to push more people into the workforce. With 10,000 baby boomers hitting retirement age each day, and an official unemployment rate of 4.4 percent, it would be difficult for the U.S. economy to grow as fast as the administration envisions without enlisting an army of new workers.

"We need folks to work," Mulvaney said. "There's a dignity to work. And there's a necessity to work to help the country succeed."

The budget assumes that annual economic growth accelerates from 1.6 percent last year to 3 percent by 2021, and remains at that level for the rest of the decade. Faster economic growth would generate trillions of dollars in additional revenue, allowing the government to balance its books by 2027.

Fiscal watchdogs say that while the goal of a balanced budget might be commendable, they're doubtful that it's realistic.

"Given the demographic challenges that we face, there is really very little chance that we will be able to sustain 3 percent growth," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "We should be realistic about the projections we make and not use aggressive economic projections to try to wish our fiscal problems away."

The budget does not call for big changes to the Social Security retirement program or Medicare, which Trump promised during the campaign to preserve. And while the president has proposed trillions of dollars in tax cuts — aimed mostly at the wealthy — the budget assumes tax revenues are largely unaffected.

"The Trump administration has taken so many important pieces of the budget off the table," MacGuineas said. "They're saying they won't raise taxes. They're going to increase defense spending. And they're not going to address our biggest programs: Social Security and Medicare. And so when you're trying to reach balance by relying on such a tiny sliver of the budget, it's very difficult to make those numbers add up."

The new budget incorporates Trump's priorities from the earlier version, including increased spending on the military and border security, with corresponding cuts to the State Department and the EPA.

The plan also includes $200 billion over a decade as a down payment on infrastructure investment, and a modest $19 billion to establish a paid parental leave program. The president's daughter, Ivanka Trump, has championed parental leave as a way to help women in the workforce, although the budget provides little detail of how the program would work.

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RACHEL MARTIN, HOST:

The Trump administration has been dogged by controversy for the past few weeks, but now, even as the president is traveling overseas, his administration is proceeding with the business of government. It's presenting the 2018 budget today. Budget Director Mick Mulvaney calls it a, quote, "taxpayer first" budget.

(SOUNDBITE OF ARCHIVED RECORDING)

MICK MULVANEY: We are no longer going to measure compassion by the number of programs or the number of people on those programs.

MARTIN: The budget includes less money for Medicaid, food stamps and disability payments; more money for the military, Border Patrol and veterans. We've got NPR's Scott Horsley on the line with us to give us a preview of the budget. Hi, Scott.

SCOTT HORSLEY, BYLINE: Good morning, Rachel.

MARTIN: How does this spending plan measure up to the draft budget plan that we saw earlier this year?

HORSLEY: Well, the budget that came out a couple of months ago was referred to at the White House as the skinny budget, and it only dealt with a skinny piece of the overall government spending pie, namely the so-called discretionary spending that Congress has to authorize each year. This budget is more comprehensive, and it includes what is really the bulk of government spending, which is entitlement programs. Now, it doesn't make big changes to the biggest entitlement programs, namely Medicare and the Social Security retirement programs. But it does call for substantial cuts to other mandatory spending, including the Social Security disability program, food stamps, as you mentioned, and Medicaid. It would cut hundreds of billions of dollars from Medicaid spending over the next decade.

MARTIN: Didn't we hear about these Medicaid cuts when the House passed their health care bill and didn't some senators say no way to those cuts?

HORSLEY: (Laughter) You're right. And that is a useful reminder, that this blueprint that the White House puts out is just sort of a notional idea of what the White House would like to see. But ultimately, it's Congress that controls the purse strings, and lawmakers will have to decide what sort of spending they're going to authorize. But yes, the Obamacare repeal bill that was drafted by Republicans in the House would cut substantially into Medicaid, and there are some Republican senators who have expressed concern about that, certainly moderate Republicans but also some very conservative Republicans in states that did expand the Medicaid program under Obamacare and in some cases saw big gains in the number of people getting health insurance.

MARTIN: So what about the deficit - which is something that has traditionally been incredibly important to the Republican Party, getting the deficit under control. Does this budget move in that direction?

HORSLEY: It does. This budget, if it were actually adopted, says it would reduce the deficit as a share of the overall economy really right away and would actually eliminate the federal budget in its 10th year in 2027. However, big asterisks attached to that one as it does rely on these pretty substantial cuts, which Congress may or may not see fit to enact. And also it relies on a relatively rosy forecast of what's going to happen with the U.S. economy. Namely, it suggests that the economy is going to ramp up rather quickly in the next several years to 3 percent annual economic growth - that's about double the growth rate we saw last year - and that it would sustain that 3 percent growth rate for the better part of a decade.

Now, a lot of independent forecasters think that's overly optimistic, partly because where would the workers come from to have that level of economic growth? We already have relatively low unemployment, and we have a lot of baby boomers who are hitting retirement age every day. One of the rationales the Trump administration offers for these cuts to safety net programs is it would effectively force some people who are not working now to get back into the workforce.

MARTIN: NPR White House correspondent Scott Horsley. Hey, Scott, thanks for breaking it down for us.

HORSLEY: Good to be with you, Rachel. Transcript provided by NPR, Copyright NPR.