U.S. Markets

Trump budget seeks 5 percent cut in non-defense spending: OMB

WASHINGTON (Reuters) - President Donald Trump will propose in his fiscal 2020 budget on Monday that the U.S. Congress cut non-defense spending by 5 percent while boosting spending on the military, veterans’ healthcare and border security, the White House budget office said on Sunday.

U.S. President Donald Trump walks out to talk to reporters as he departs for travel to Alabama and Florida from the White House in Washington, U.S. March 8, 2019. REUTERS/Jonathan Ernst

The Republican president’s proposal, slated for release at 11:30 a.m. (1530 GMT) on the Office of Management and Budget’s website, is expected to be the first volley in this year’s bitter funding fight with Congress, which has control over federal purse strings.

His budget blueprint is expected to be rejected by Congress, where Democrats control the House of Representatives. Spending bills typically need 60 votes to get through the 100-member Senate, where Trump’s fellow Republicans hold 53 seats.

Democratic leaders in both the House and Senate immediately panned Trump’s request for $8.6 billion to build a wall on the southern border with Mexico, reported by Reuters earlier on Sunday.

Last year, a protracted battle over Trump’s demand for more than $5 billion in wall funding led to a five-week partial shutdown of the government. Congress’ refusal to grant him the funds led Trump to declare a national emergency so he could redirect funds approved for other purposes to the project.

The White House and Congress must agree on funding by Oct. 1 to keep the government funded and open - which coincides with the deadline to lift the debt limit, or risk a default, which would have severe economic repercussions.

At the same time, Trump and congressional leaders also face a deadline from a 2011 fiscal belt-tightening law that would see all discretionary spending slashed by $126 billion or 10 percent, unless they agree to lift spending caps.

Tax cuts have been a priority for the Republican White House and Congress in recent years, rather than fiscal restraint. The deficit ran to $900 billion in 2019, and the national debt has ballooned to $22 trillion.

Trump wants to cut non-defense program spending by an average of 5 percent below caps that Congress had set for fiscal 2019, the OMB said in a release.

“President Trump added nearly $2 trillion to our deficits with tax cuts for the wealthy and large corporations, and now it appears his budget asks the American people to pay the price,” said John Yarmuth, Democratic chairman of the House Budget Committee, who added: “It has no chance in the House.”

Trump’s budget would boost funding for some of his priorities. For example, Trump will propose a 5 percent increase for the Department of Homeland Security to help pay for his border wall and hire more immigration and border enforcement officials.

The budget also includes an increase of almost 10 percent for veterans’ healthcare programs from last year, and investments in opioid addiction programs, the OMB said.

That means some departments and programs may see steeper proposed cuts than 5 percent.


Some programs will be targeted for cancellation altogether to push total non-defense discretionary spending below a cap of $542 billion established in the 2011 Budget Control Act, an administration official told Reuters, speaking on condition of anonymity. The official did not specify which programs would be targeted.

“This budget shows that we can return to fiscal sanity without halting our economic resurgence while continuing to invest in critical priorities,” Russ Vought, the acting OMB director, said in a statement.

The budget was expected to boost defense spending, although details were not immediately available.

Vought said last month that new defense spending would be included in the Overseas Contingency Operations (OCO) fund, more traditionally used for emergencies.

Fiscal hawks have characterized OCO as a slush fund or budget gimmick to get around spending caps.

Also unclear is how the budget will handle mandatory spending on programs for seniors like Medicare and Social Security, which account for the largest portion of the budget. The programs are popular with older voters.

The OMB said the budget would propose $2.7 trillion in spending cuts over a decade, which it said would be more than any other administration had ever planned.

But the cuts would not be enough to balance the budget in that timeframe. The OMB said the budget was designed to balance by 2034, exceeding the traditional 10-year period that previous administrations targeted.

Reporting by Roberta Rampton; Editing by Peter Cooney