Feb 9, 2020 - Politics & Policy

Despite massive cuts, deficits flow through Trump's second term

Trump addresses the crowd during the Opportunity Now summit at Central Piedmont Community College on Feb. 7 in Charlotte, N.C. Photo: Sean Rayford/Getty Images

President Trump's 2021 budget proposes $4.6 trillion in deficit reduction, but it would take 15 years to balance, according to a source familiar with the budget.

The big picture: The budget will project deficits until 2035 and rather than proposing a new round of tax cuts, it assumes the extension of Trump's 2017 tax bill through the next term.

Between the lines: On the 2016 campaign trail, Trump promised to eliminate the national debt in eight years. Not only has he failed to do that, but he's grown the debt by a trillion dollars each year he's been president. Even using optimistic scenarios, Trump's 2021 budget projects annual deficits to continue well beyond a second Trump term in office.

By the numbers: The Trump 2021 budget will propose a massive spending cut on nondefense activities — slashing almost $40 billion from the current levels to a proposed $590 billion, per sources familiar with the budget, and first reported by the Wall Street Journal.

  • Trump's budget "targets $2 trillion in savings from mandatory spending programs, including $130 billion from changes to Medicare prescription-drug pricing, $292 billion from safety-net cuts—such as work requirements for Medicaid and food stamps—and $70 billion from tightening eligibility access to federal disability benefits," per the WSJ.
  • The Environmental Protection Agency's budget would also be slashed by 26%, per the WSJ.

Trump will request $2 billion for his wall along the southern border, per a source familiar. That's less than half the $5 billion Trump requested for the wall in last year's budget.

  • "The president has kept his promise to secure the border," said a senior administration official. "With funding available, the administration will build up to approximately 1,000 miles of border wall along the southwest border."

Reality check: Budgets are best understood as outlines of the president's priorities — and opening bids for negotiations — rather than blueprints of what Congress will ultimately agree upon.

  • Lawmakers of both parties have ignored and stymied Trump's controversial requests, forcing him to resort to other legal avenues — such as declaring a national emergency to get money for his wall.

Go deeper

Trump's budget proposal relies on highly unlikely expectations

Reproduced from WSJ.com; Chart: Axios Visuals

President Trump is expected to double down on big spending and tax cuts when he releases his budget proposal for fiscal year 2021 later today.

The big picture: The budget proposes increases in defense spending and other categories and also assumes the annual budget deficit will fall from more than $1 trillion in 2020 to around $200 billion, largely as a result of increased U.S. growth.

$3.83 billion from Pentagon budget to be diverted for Trump border wall

A section of the U.S.-Mexico border wall. Photo: Jinitzail Hernández/CQ-Roll Call, Inc via Getty Images.

The Department of Defense is rerouting $3.83 billion from its budget to fund President Trump's southern border wall, according to budget documents cited by the Washington Post.

Why it matters: The money is being pulled from other Pentagon budget items including aircraft, Army automobiles and miscellaneous equipment to fulfill Trump's campaign promise of a border barrier between the U.S. and Mexico. The reallocation is part of a larger effort to divert $7.2 billion in Pentagon funds this year for the project, per the Post.

Hospitals and Medicaid enrollees lose under Trump's budget

Illustration: Aïda Amer/Axios

President Trump's 2021 budget proposes massive reductions in Medicare and Medicaid spending, which would be felt most acutely by hospitals and Medicaid beneficiaries.

Why it matters: Budget proposals are more about messaging than policies that have any chance of becoming law, but it's still a good indication of the direction the administration would like to head in if Trump wins re-election.

Go deeperArrowFeb 11, 2020 - Health