Sunday, Feb 25, 2018 | Last Update : 03:09 PM IST
US budget to usher in new deficit era with $1 trillion-plus annual deficits.
Washington: President Donald Trump unveiled a $4.4 trillion budget plan on Monday that envisions steep cuts to America’s social safety net, but mounting spending on the military, formally retreating from last year’s promises to balance the federal budget.
The President’s spending outline for the first time acknowledges that the Republican tax overhaul passed last year would add billions to the deficit and not “pay for itself” as Trump and his Republican allies asserted.
If enacted as proposed, though no presidential budget ever is, the plan would establish an era of $1 trillion-plus yearly deficits. The open embrace of red ink is a remarkable public reversal for Trump and his party, which spent years objecting to President Barack Obama’s increased spending during the depths of the Great Recession. Rhetoric aside, however, Trump’s pattern is in line with past Republican presidents who have overseen spikes in deficits as they simultaneously increased military spending and cut taxes.
“We’re going to have the strongest military we've ever had, by far,” Trump said in Oval Office. “In this budget we took care of the military like it’s never been taken care of before.”
Trump’s budget revived his calls for big cuts to domestic programmes that benefit the poor and middle class, such as food stamps, housing subsidies and student loans. Retirement benefits would remain mostly untouched by Trump’s plan, as he has pledged, though Medicare providers would absorb about $500 billion in cuts — a nearly 6 per cent reduction. Some beneficiaries in Social Security’s disability programme would have to re-enter the workforce under proposed changes to eligibility rules. While all presidents’ budgets are essentially dead on arrival— Congress writes and enacts its own spending legislation — Trump’s plan was dead before it landed.