Trump's Planned $54B Budget Cut for Non-Defense Funds Will Hurt States

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WASHINGTON – President Trump's budget plans to increase defense programs by $54 billion and reduce discretionary programs by the same amount will hurt state and local governments, budget watchers said Monday.

An Office of Management and Budget official told reporters during a briefing Monday morning, that the administration plans to release a "budget blueprint" in mid-March that will reflect the president's proposal for defense to be increased by $54 billion and discretionary programs cut by the same amount.

Starting today, White House officials will talk to the heads of federal agencies and give them a "top line" budget figure, he said. The blueprint will contain the agency levels, but not a lot of details and tax proposals, which will come later, the OMB official said.

Lisa Gilbert, director of Public Citizen's Watch Division, said in a release, "While we are still reviewing the details, it is clear that Trump's proposed budget would emaciate public services and protections, endangering American workers, consumers and families."

House Minority Leader Nancy Pelosi, D-Calif., also dissed the proposal. "President Trump's budget blueprint is a prescription for America's decline. A $54 billion cut will do far-reaching and long-lasting damage to our ability to meet the needs of the American people and win the jobs of the future," she said.

Senate Minority Leader Chuck Schumer added, "It is clear from this budget blueprint that President Trump fully intends to break his promises to working families by taking a meat ax to programs that benefit the middle-class."

Marcia Howard, executive director of Federal Funds Information for States, said by way of comparison, in fiscal 2015 there was $585 billion for all non-defense discretionary spending. Federal grants equaled about $200 billion, or almost one third of that amount.

"We'll have to see, but if it's a 10% cut that would be a big cut," she said. She pointed out that not all of the cuts will be to grants.

In fact, the OMB official said there will be a large reduction in foreign aid. "The president wants other countries to step up" and play more of a role in areas where the U.S. has provided aid, he said.

John Hicks, executive director of the National Association of State Budget Officers, said, "If domestic discretionary is dropped $54 billion that's likely to take a bite out of programs that state and local governments run for the feds," like environmental programs, as well as for those programs receive federal assistance.

Hicks and Howard both said the federal government provides the most grants and money in the areas of education, transportation and housing.

Hicks and Frank Shafroth, director for the Center for State and Local Leadership at George Mason University, both said that in recent years there has a been general bipartisan accord that defense programs should receive the amount as discretionary programs. Trump's proposed budget would end that, he said.

"If you have deep cuts in discretionary spending and then you take out $10 billion for the wall, what does not mean for infrastructure?" Shafroth asked, adding, "Something isn't going to work here."

He said Trump's $1 trillion proposal, which would use tax credits to entice private companies to help with infrastructure projects may work for tolled roads, but it won't help state and local jails, schools, and other governmental projects. "The vast amount of infrastructure in this country does not fit [with Trump's] model," he said.

Shafroth said with the $54 billion of discretionary cuts, "I would expect very deep cuts at the Environmental Protection Agency, the Department of Housing and Urban Development … the Transportation Department … the Internal Revenue Service."

"Between the likely proposed steep cuts in discretionary funds and the tax changes, [the budget] will likely transfer much greater fiscal burdens on state and local governments to provide essential governmental services," he said.

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