Briefing Book

Showing How Not to Budget

And how the current process might be stopped.

By David Kamin

Tagged budget

The Trump Administration’s “budget blueprint” (can it really be called that if it excludes most of the budget?) released earlier today shows exactly how not to run a budget process. It’s not just that the Trump Administration put out a budget dealing only with discretionary spending (less than one-third of federal programs), giving far less information and detail than previous budget frameworks released at the beginning of an Administration.

It’s that the Administration felt the need to mostly—though not entirely“pay for” the defense discretionary increases by slashing non-defense discretionary spending by $54 billion, treating the rest of the budget as if it doesn’t exist for these purposes.

But, the rest of the budget does exist. And it is a false choice to say that to increase defense discretionary spending, non-defense discretionary spending must be cut by $54 billion or else we will be fiscally “irresponsible.”

There’s also, of course, the Trump tax plan, which has yet to be revealed. What we know so far suggests that plan will vastly increase deficits, swamping the size of these cuts. His last campaign plan featured a tax cut for the top 1 percent running at about $300 billion per year.

And, as I’ve explained here previously, the Administration—despite what some officials there have claimed—cannot add enough base broadening to that plan without still cutting taxes at the top, unless they abandon their planned rate cuts altogether. So, if we’re talking fiscal responsibility, maybe that’s a place to start?

Or, we might think of using those tax expenditures to pay for investments in defense and non-defense. After all, itemized deductions for the top 1 percent alone do cost around $60 billion per year. Perhaps paring those back should be on the table to pay for priorities other than cutting tax rates.

Or, we might also consider reasonable savings from Medicare—despite the Trump Administration’s statement that it basically shouldn’t be touched. The Obama Administration put about $40 billion in health savings per year over the next decade on the table, largely focused on continuing efforts to reduce cost growth while protecting consumers.

The Trump Administration’s failed budget process is perhaps epitomized by its claims regarding infrastructure. Trump even says he wants to be an infrastructure President. But, so far, the only concrete proposals he’s put on the table—in this blueprint—involve slashing the New Starts federal transit program and eliminating Transportation Investment Generating Economic Recovery (TIGER) grants, which have helped finance important infrastructure projects across the country. (Admittedly, there are also some other reductions to Transportation, for example for Amtrak long-haul service, that I find more attractive, even if politically difficult!)

The little we know of Trump’s apparently separate infrastructure plan is that it involves tax credits that may do little to actually encourage additional investment, and it may not in fact be acted on by Congress. By contrast, annual appropriations certainly will be on the table, including Trump’s cuts to proven infrastructure programs.

The Obama Administration put forward a budget that significantly increased both defense and non-defense discretionary spending—reflecting the fact that these core areas have suffered major cuts in recent years as other parts of the budget were left untouched. And it did so even as it proposed trillions of dollars in deficit reduction over the next decade. That reflected a comprehensive and rational approach to budgeting.

The Trump approach is anything but.

In the end, most discretionary budget changes will require gathering 60 votes in the Senate. Reconciliation—avoiding the filibuster barrier—is not an option. For instance, the Byrd rule prevents changes in the current discretionary caps using the reconciliation process, and Republicans will need to alter those caps to enact the changes that the Trump Administration wants. Appropriations bills themselves can be filibustered.

So, fortunately, leverage exists at the moment to insist on a very different approach to the budget. It should be used.

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David Kamin is a professor of law at New York University. From 2009-2012, he served in the White House as special assistant to the president for economic policy and, before that, as an adviser to the director of the Office of Management and Budget.

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