5 things to know about Trump's $4.4trn budget

2018-02-13 21:31
US President Donald Trump. (Andrew Harnik, AP)

US President Donald Trump. (Andrew Harnik, AP)

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Washington - US President Donald Trump has sent Congress a proposal to spend $4.4 trillion in the 2019 budget year, which begins in October.

Five things to know about his budget proposal:

Budget deal impact

Many presidential budgets are labelled "dead on arrival" because Congress will end up rejecting the spending and tax proposals put forward by the administration.

But this budget was in the unusual position of being more irrelevant than usual because Congress just last week passed a measure to boost the spending limits for defence and domestic programmes that the administration had followed in writing this budget.

Unending deficits

The administration's new budget showed a dramatic increase in deficits over the 10-year budget window, mainly a reflection of the impact of the $1.5 trillion tax cut approved in December.

While Trump's first budget, issued in May 2017, projected that it could wipe out the annual red ink by 2027, the new 10-year budget shows unending deficits.

And this total of red ink does not take into account the higher spending that will occur under last week's budget deal.

Medicare changes

The budget calls for about $500bn in cuts from projected Medicare spending over the next decade, primarily by trimming payments to hospitals and rehabilitation centres.

These cuts were not in the budget Trump proposed in 2017, and Democrats immediately accused the president of breaking a campaign promise he made in 2016 not to touch Medicare or Social Security.

Infrastructure

The president wants to use $200bn in federal money over the next decade to support $1.5 trillion in new spending to rebuild the nation's crumbling infrastructure.

The administration released a 55-page "legislative outline" for lawmakers who will write the bills needed to implement the proposal.

With the plan heavily dependent on state and local dollars, Democrats warned it would raise tolls on commuters, sell off government-owned infrastructure to Wall Street and eliminate critical environmental protections.

NASA plans

The budget proposes pulling NASA out of the International Space Station by 2025 with private businesses running the space station instead.

The government would set aside $150m to encourage commercial development. The plan immediately drew opposition. Senator Bill Nelson, a Florida Democrat who has flown in space, said "turning off the lights and walking away from our sole outpost in space" makes no sense.

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