Donald Trump won the US election by taking the populist path, blaming “elites” and vested interests in the Washington “swamp” for all the ills that afflict the American economy and, perhaps, the American psyche. Vote for me, he said, and I’ll make America great again and create new jobs and expand the economy…
The budget proposals that the Trump administration has just presented could be seen as a vicious slap in the face to many poorer Americans who placed their faith in candidate Trump. The headline figure is that the administration wants to rip a staggering $190 billion from the food stamp programme which helps 42 million of the poorest in America. The budget also calls for a limit to farm subsidies; $800 billion hacked from the Medicaid programme; cuts to the Meals on Wheels service which helps the housebound elderly, veterans and the disabled; end subsidies on student loans; and cuts to family planning groups which offer abortions.
"Yes, you have to have compassion for folks who are receiving federal funds, but you also have to have compassion for the folks who are paying it," opined the White House budget director (who, one imagines, would never have been a recipient of federal aid to the poor in his life).
The budget is worth $4.1 trillion and proposes that the US military budget is increased by 10% whilst $1.6 billion is, pardon the pun, ring-fenced for the construction of a border wall with Mexico. Another plan is to create a parental leave grant of six weeks for new mothers and fathers.
Approval of the budget as it stands is unlikely. It will be strongly resisted by the (minority) Democrats in both houses, but it is also likely to face stiff criticism and remodelling at the hands of Republicans with dovish and hawkish elements of the party upset by some of its components.
The budget projects that growth of 3% per annum will eliminate the budget deficit by 2027 (even were he to win a second term, Trump will be out of office by 2025), returning to surplus for the first time since President Clinton was in office. The Congressional Budget office assumes a much more modest average growth figure of 1.9%. President Trump is also planning to slash corporation tax from its current level of 35% in the hope of stimulating the economy to more than compensate for the loss in tax revenue.