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Nick Wakeman

Is Trump's fiscal 2019 budget DOA?

I have two questions given the fanfare around the Trump Administration’s budget announcement and the simultaneous release of its infrastructure plan.

Question 1: Does the president’s proposed fiscal year 2019 budget really matter? It follows his 2018 skinny budget in asking for more defense spending and for cuts to civilian programs.

But that 2018 proposal never went anywhere and the 2019 proposal comes out just days after passage of a two-year budget deal that expands the spending caps for defense and civilian spending well beyond what Trump has asked for.

Congress of course still has to pass appropriations for 2018 before it can get to work on fiscal 2019. The current continuing resolution runs through March 23. We’ll be nearly six months into fiscal 2018 when appropriations are in place for the rest of the year.

So what does the fiscal 2019 proposal really do? As with most presidential budget proposals, it is a political document. It bolsters what the administration wants to get done, like the wall and a modernized nuclear weapons program.

It also goes after the things it doesn’t like. For example, the new proposal calls for a 34-percent cut to the Environmental Protection Agency from fiscal 2017 appropriations and 26 percent decrease at the State Department. And there are the cuts to Medicaid, Medicare and Social Security.

Many of these cuts are similar to what the Trump Administration asked for in the skinny budget last year.

Of course, because the fiscal 2018 appropriations haven’t been made, we don’t know precisely what the spending levels will be. Given that Congress approved the Bipartisan Budget Act of 2018 and the president signed it, it is doubtful that we will see cuts anywhere as severe as the president has proposed. If we see cuts at all.

Politico may have described it best when it called the 2019 proposal a “jumble of mixed messages.”

But it is clear the president wants to take on entitlement spending such as Medicare, Medicaid and Social Security.

The increase in defense spending to $716 billion will likely have bipartisan support but it is hard to imagine enough Democrats lining up to significantly cut civilian spending on safety net programs, especially in an election year.

White House Budget Director Mick Mulvaney is slated to testify before the Senate Budget Committee on Tuesday and the House Budget Committee on Wednesday.

My second question is about the infrastructure plan also unveiled on Monday. In many ways, I see this as a higher priority for the administration and perhaps they released it as way to quickly move the conversation away from the budget proposal.

The infrastructure plan calls for $1.5 trillion over 10 years. But all of that money won’t come from the federal treasury. A significant portion calls for public-private partnerships and more funding from state and local government entities.

The New York Times calculated that for every dollar of federal investment there would need to be $6.50 in private sector investment. The plan's outline also calls for streamlining approval processes so projects are built more quickly.

But the document is short on specific, especially in the section on “transformative” projects.

Political prognosticators aren’t voicing much confidence that the infrastructure plan will get very far. Conservatives are balking at the $1.5 trillion price tag and Democrats say that it has an over reliance on private sector investment. Both are probably right.

Before Congress can give much attention to infrastructure it still has to get through fiscal 2018 appropriations as well as trying to resolve the immigration issue. And then there is the mid-term election in the fall.

There is a good possibility that the fiscal 2019 budget proposal and the infrastructure plan will not go much farther than the headlines and the talk shows before they are on a shelf gathering dust.

Posted by Nick Wakeman on Feb 12, 2018 at 12:43 PM

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