Analysis: Here’s Why Trump’s Budget Proposal May Cut Deeper Than Advertised

Even cutting 5 percent would be a tough sell in Congress for either party

Obama budget director Jack Lew also got tough with agency budgets. (Tom Williams/CQ Roll Call file photo)
Obama budget director Jack Lew also got tough with agency budgets. (Tom Williams/CQ Roll Call file photo)
Posted October 18, 2018 at 11:15am

President Donald Trump’s new push to trim the proposed budgets of all federal agencies next year could prove more draconian than it sounds, amounting to a 25 percent cut for all nondefense programs compared to the current year.

Technically, the request is for 5 percent cuts across the Cabinet departments, as Trump laid out at a White House event Wednesday: “We’re going to ask every [Cabinet] secretary to cut 5 percent for next year,” Trump told reporters, presumably referring to fiscal 2020, beginning next October.

An across-the-board cut of 5 percent from all discretionary spending likely to be enacted in fiscal 2019 would amount to about $62 billion, not counting money for war-related operations and natural disasters. However politically unpalatable that may be, such cuts could actually understate the depths of reductions the administration may be envisioning.

That’s because if recent history is any guide, the reductions may not come from current spending, but from already depressed fiscal 2020 levels previously laid out in the February budget request. The Obama administration Office of Management and Budget asked agencies to cut their proposed budgets by 5 percent in that fashion on at least four occasions.

If that’s the case with the Trump OMB this time, it would mean fiscal 2020 nondefense discretionary budget authority in his request due next February would be roughly $445 billion — a whopping $152 billion, or 25 percent, cut from the fiscal 2019 cap signed into law by Trump in February. That would also be nearly $100 billion below the austere fiscal 2020 nondefense funding required under the 2011 deficit reduction law — already reviled by lawmakers from both parties — which snaps back into place upon expiration of the February deal after fiscal 2019.

Trump said the Pentagon wouldn’t be spared from the budget-trimming exercise; but when pressed, he said the defense budget proposal would “probably be $700 billion.” That figure is closer to a 2 percent cut from the current year’s allocation of $716 billion for the Pentagon and other defense-related agencies. But considering the White House’s allotted defense budget figure for fiscal 2020 was about $733 billion when issued in February, a 5 percent cut would take that figure down just shy of $700 billion.

During the Obama years, OMB would often notify agencies that they should plan to trim their requests from levels proposed in the February budget release for the following fiscal year. As noted, a 5 percent reduction was a typical request to the agencies under the Obama OMB, so that’s not a new idea from Trump. Obama proposed to go even further after the budget battle in 2011 leading to the deficit reduction law; then-OMB Director Jack Lew told agencies to propose cuts as large as 10 percent from the current fiscal year.

If Trump were using the current year as his baseline instead, as Lew and Obama did in 2011, of course the cuts would be much more manageable. But even cutting $62 billion, or 5 percent, from this year’s spending would be a tough sell in Congress — no matter which party fares better in the November midterm elections.

The first two years of the Trump administration have shown that lawmakers can’t pass appropriations unless spending goes up, not down — for both defense and nondefense programs alike. But the administration has been a reluctant player in the new budget deal, bristling at increases in nondefense spending that it considers excessive. While the deal allows for $597 billion in nondefense discretionary spending in fiscal 2019, Trump has proposed spending only $540 billion, a 9.5 percent reduction.

And while most of the current year’s spending bills have yet to be completed, it’s already clear Trump won’t get many of the cuts he sought. Lawmakers of both parties have roundly rejected deep cuts to the State Department, EPA and more. In fact, a Republican-led House and Senate are heading toward a 3.1 percent increase in nondefense discretionary spending for this year, compared to fiscal 2018 levels. That’s a 10.4 percent increase over Trump’s request.