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.
- The budget projects 3% growth every year for the next 15 years, even though annual GDP has not grown by that amount during Trump's presidency and last hit that growth rate 15 years ago.
- The growth projection is about double the CBO's expectation for growth during that time period.
Between the lines: Trump's budget also proposes to cut spending by $4.4 trillion over the next 10 years. Of that, it targets $2 trillion from mandatory spending programs, which would require action from Congress.
- Trump proposes to cut EPA spending by 26%, the Department of Housing and Urban Development’s budget by 15%, the Commerce Department by 37%, foreign aid by 21%, and the CDC by 9%.
Reality check: Presidential budget proposals rarely, if ever, reflect actual spending. However, the proposal does provide insight into the Trump administration's policy priorities.
What they're saying: Vice President Mike Pence suggested in a Friday interview with CNBC that the debt and deficits are not a primary focus of the administration.
- "The president came in and said first and foremost we have to restore growth," he said. "That's how we'll deal with the long-term fiscal challenges facing our country."
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