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Trump budget plan to propose major cuts for foreign aid, EPA: source

Thursday, March 16, 2017 - 08:42

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President Donald Trump will propose deep cuts for foreign aid and environmental protection and a steep increase in military spending in a budget plan to be released on Thursday, a congressional source said.

[WASHINGTON] President Donald Trump will propose deep cuts for foreign aid and environmental protection and a steep increase in military spending in a budget plan to be released on Thursday, a congressional source said.

The budget plan for fiscal 2018 will call for cuts of 28 per cent for the State Department, the source, who was briefed on the outline of Trump's plans, told Reuters.

Mr Trump is proposing a 10 per cent increase in defence spending, equivalent to US$54 billion, and a 6 per cent increase in funding for homeland security, the source said.

To fund those increases, he is seeking deep reductions in programmes such as public broadcasting, funding for the arts and science, and heating subsidies. Those programmes have been targeted by Republican politicians before, but in many cases the proposed cuts have failed to make it through Congress.

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The blueprint highlights Mr Trump's priorities for government spending and sources say it includes a funding cut of up to a third for the Environmental Protection Agency. But it is ultimately up to Congress to decide how to allocate funds.

Even though Mr Trump's Republicans control both the House of Representatives and the Senate, the budget is likely to face resistance. Some moderate Republicans have already expressed unease with some of the proposed cuts.

"They're really going to be cutting into bone," said Kenneth Baer, a former associate director at the Office of Management and Budget who helped draft former Democratic President Barack Obama's first four budgets.

The proposal includes US$30 billion in supplemental funds for fiscal 2017 for defence, primarily border security, according to the source. It also includes US$1.5 billion in 2017 and US$2.6 billion in 2018 for Mr Trump's promised wall on the southwestern border with Mexico.

Federal funding for the Corporation for Public Broadcasting will be phased out under the plan, the source said.

'EMACIATED' PLANS

The document will begin months of debate on government spending, with Democrats and moderate Republicans worried the budget could force tough decisions on popular programmes such as aid for disabled children and hot meals for the elderly, and conservatives pushing for more cuts down the line.

New administrations typically submit to Congress what is known as a "skinny budget", a broad outline of spending proposals, in their initial months in office. Lengthy volumes of fiscal plans and projections follow a couple of months later.

But the Trump budget for the fiscal year that begins on Oct 1, 2017, may be more truncated than usual, said three budget experts interviewed by Reuters.

The document is expected to look only at one narrow piece of the budget: "discretionary" programmes that are subject to renewal every year and not so-called entitlement programmes such as the Social Security retirement program and the Medicare and Medicaid health programmes.

"This one appears as though it will be one of the skinniest budgets of recent memory. Possibly emaciated," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Social programmes such as Social Security and Medicare account for the majority of overall US federal government costs. Mr Trump pledged to protect the two programmes during the 2016 campaign.

"If they put out a budget as skinny as advertised, it might not really tell us a whole lot about the president's overall budget and the direction of fiscal policy," said Robert Bixby, executive director of the Concord Coalition, a nonpartisan budget reform advocacy group.

'LONG GAME'

The "skinny budget" is not expected to address other potentially expensive promises Mr Trump made during his campaign.

Mr Trump wants to boost infrastructure spending while cutting taxes. Although he has not given details on how or when that would happen, the pledges worry Romina Boccia, a fiscal policy expert at the conservative Heritage Foundation. "You could blow up the deficit even more," she said.

If Mr Trump sticks with his campaign spending promises but decides to make a bigger push to rein in the deficit, more cuts could be in store for programmes such as food assistance for the poor, college Pell Grants for the poor, and some income assistance for poor senior citizens, said Sharon Parrott, senior fellow at the Center of Budget and Policy Priorities.

"That's what's left," Ms Parrot said in an interview.

Mr Trump's "skinny budget" will also make funding requests for the remaining months of the current fiscal year.

As long as increases in military spending are offset with cuts elsewhere for 2018, keeping the deficit in check, Republican Representative Steve Pearce said he was willing to wait patiently for broader fiscal belt-tightening down the road.

"We're playing a very long game here in the debt and deficit," Mr Pearce said in an interview.

REUTERS

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