Overnight Finance: Inside Trump's first budget | 66 programs on the chopping block | Hearing highlights border tax divide | Labor to implement investment adviser rule

Overnight Finance: Inside Trump's first budget | 66 programs on the chopping block | Hearing highlights border tax divide | Labor to implement investment adviser rule
© Greg Nash

Trump releases budget that slashes government programs: The Trump administration on Tuesday unveiled a budget seeking $1.5 trillion in nondefense discretionary cuts and $1.4 trillion in Medicaid cuts over the course of a decade, while adding nearly half a trillion dollars to defense spending.

The plan, titled "A New Foundation for American Greatness," would dramatically reshape federal spending, cutting anti-poverty and safety net programs, but leaving Medicare and the retirement portion of Social Security untouched. 

Congress is expected to reject many of the proposals as it takes up the budget in the coming weeks and months. It is being released, unusually, with President Trump out of town on his first foreign trip in office.

Relying on a mix of growth projections that most economists say are extremely optimistic and an assumption that a tax reform plan will manage to slash tax rates while remaining revenue-neutral, the plan lays out a path to balance the budget within a decade and lower the debt burden to 60 percent of gross domestic product. The Hill's Niv Elis reports: http://bit.ly/2qTbD0C.

For five takeaways from Trump's first budget proposal, click here: http://bit.ly/2reGupz

And click here for a copy of the full budget: http://bit.ly/2qemv6c

GOP senators knock Trump's budget proposal: A number of Republican senators quickly distanced themselves from President Trump's annual budget proposal.

Sen. Dean HellerDean Arthur HellerTrump to attend fundraiser for Heller Dems seek to seize on data privacy as midterm issue Anti-Trump Republicans better look out — voters might send you packing MORE (Nev.), the most vulnerable GOP senator up for reelection in 2018, blasted Trump's fiscal year 2018 budget as "anti-Nevada."

"From slashing funding for important public lands programs to its renewed effort to revive the Yucca Mountain nuclear waste repository, the President's budget request contains several anti-Nevada provisions," he said in a statement.

Trump's budget includes money to restart licensing to store nuclear waste in Yucca Mountain after former President Barack ObamaBarack Hussein ObamaShould President Trump, like President Obama, forsake human rights in pursuit of the deal with a tyrant? Obama shares summer reading list ‘Three Californias’ plan would give Dems more seats MORE halted a plan to use the mountain as a permanent storage facility for nuclear and radioactive waste. 

Sen. Lindsey GrahamLindsey Olin GrahamGOP senator: Family separation policy 'inconsistent' with American values Trump’s trusted diplomat faces daunting task with North Korea Trump’s danger on North Korea? Raised expectations MORE (R-S.C.) told Bloomberg that Trump's proposal is "terrible," pointing to deep cuts to the State Department. The Hill's Jordain Carney has more on the GOP reaction: http://bit.ly/2qT4n54.

Labor Department to implement Obama's investment adviser rule: The Labor Department will implement a controversial Obama-era rule for financial advisers on June 9, Secretary Alexander Acosta announced Monday evening in The Wall Street Journal.

Acosta wrote that the Labor Department couldn't find a legal basis to delay the "fiduciary" rule beyond June 9, the end date of a review designated by President Trump via executive order earlier this year.

"We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input," Acosta wrote. "Respect for the rule of law leads us to the conclusion that this date cannot be postponed."

The Labor Department will begin implementing the rule on June 9, though Acosta said it would continue to explore potential changes to the rule. Firms will be given until 2018 to comply with the rule without penalty. I have more here: http://bit.ly/2qTg23H.

Hearing highlights GOP divide over border tax: A House Ways and Means Committee hearing on Tuesday showed Republicans are divided over their leadership's border-adjustment tax proposal.

Even on the tax-writing panel, rank-and-file Republicans expressed worries that the proposal championed by Speaker Paul RyanPaul Davis RyanWhite House faces growing outcry over migrant family policies John Legend slams Paul Ryan for Father's Day tweet, demands end to family separation Trump faces Father’s Day pleas to end separations of migrant families MORE (R-Wis.) could hurt their constituents.

If supporters hoped the hearing would provide some momentum, they were disappointed. 

Some Republicans on the Ways and Means Committee appeared to be supportive of the border-adjustment proposal -- especially the most senior GOP lawmakers. 

"Our goal is not simply to eliminate any tax reason to move American jobs overseas, but to reestablish America as a 21st century magnet for new jobs and investment," said Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyOn The Money: Trump imposes B in tariffs on China | China blasts 'fickle' Trump, promises payback | Trump to name consumer bureau director next week Trump announces tariffs on billion in Chinese goods Congress faces rising pressure to fix tax law MORE (R-Texas).

But several other GOP lawmakers on the panel expressed concerns or outright opposition to the border tax plan. The Hill's Naomi Jagoda takes us there: http://bit.ly/2qTbquF.

Healthcare saga shaping GOP approach to tax bill: Republican leaders and the White House are trying to learn from the rocky start of healthcare reform as they pursue an overhaul of the tax code.

The House's bill to repeal and replace ObamaCare suffered a near-death in March, when factions of the Republican conference warred openly over the details of the legislation. While the bill was revived earlier this month, GOP leaders want to prevent something similar from happening on tax reform.

To that end, they have been cautious about setting hard deadlines for tax reform legislation, even as they spend time gathering feedback at hearings and outreach sessions.

Republican leaders intend to pass both healthcare and tax legislation without Democratic votes, which leaves little margin for error. The party can't afford another major eruption over tax reform similar to the fight that nearly took down the healthcare bill. Here's more from Naomi Jagoda: http://bit.ly/2qT95jk.

Happy Tuesday and welcome to Overnight Finance, where we're probably paying more attention to Trump's budget than Congress is. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

On tap tomorrow

  • House Budget Committee: Hearing on the White House fiscal 2018 budget with Office of Management and Budget Director Mick Mulvaney, 9:45 a.m. http://bit.ly/2qzHtiF.
  • House Ways and Means Committee: Hearing on the White House fiscal 2018 budget, with Treasury Secretary Steven Mnuchin, 10 a.m. http://bit.ly/2qzvyRT.

Here are the 66 programs eliminated in Trump's budget: President Trump's fiscal 2018 budget proposal would completely eliminate 66 federal programs, for a savings of $26.7 billion.  
Some of the programs would receive funding for 2018 as part of a phasing-out plan.
Here are the programs the administration wants on the chopping block, from Niv Elis: http://bit.ly/2qSMxz5.

Mnuchin pressed on Trump's promise not to cut Medicaid: Treasury Secretary Steven Mnuchin was pressed Tuesday about President Trump's broken campaign promise not to cut Medicaid to reduce healthcare costs.

Trump's budget, released Tuesday, includes $1.4 trillion in cuts to Medicaid over 10 years, thought the president promised repeatedly while campaigning that he wouldn't slash Social Security, Medicare or Medicaid benefits for current recipients.

Mnuchin said at the Peter G. Peterson Foundation fiscal forum Tuesday that Trump is trying to reduce healthcare costs, though he didn't specify how cutting insurance assistance for needy families would do that.

"The Medicaid reductions and what's gone on -- what the president is trying to do is control healthcare costs," Mnuchin told CNBC's John Harwood. "We have a system that is broken and we're trying to fix that system and that's what the healthcare program is all about," he added, referring to the American Health Care Act (AHCA). I've got more here: http://bit.ly/2qT0IV1.

White House banks on savings from Dodd-Frank rollback in budget: The White House hasn't specified how it would seek to roll back Obama-era financial regulations, but projected in its Tuesday budget proposal doing so would save the United States $35 billion over 10 years through its efforts.

President Trump's first formal budget plan reflects his promise to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act with a pledge to foster "economic growth and vibrant financial markets" by scrapping its "regulatory excesses."

The budget doesn't detail which specific parts of the law would be rolled back to generate savings and boost the economy. I explain it all here: http://bit.ly/2qSZgSB.

Summers: Budget plan has 'egregious' accounting error: Former Treasury Secretary Larry Summers on Tuesday said that President Trump's budget relies on an "egregious" accounting error to make its numbers add up.

In a Washington Post op-ed, Summers noted that the budget seems to double-count the economic benefits from tax reform.

Though GOP plans for tax reform are still far from complete, the budget assumed the reform would be revenue-neutral. Proponents of the reform have said that the benefits from cutting taxes would boost the economy, which would be a key element of keeping the reform neutral.

But the budget also assumes high levels of economic growth outside the framework of the tax reform and counts the revenue benefits toward its totals.

"This is a mistake no serious business person would make. It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them," Summer wrote: http://bit.ly/2qSYEwc.

Budget chief: Trump won't continue Obama's 'crazy' spending on climate: President Trump's top budget official says that the administration will not continue former President Obama's "crazy" spending on climate change science.

Speaking with reporters Tuesday, the day the Trump administration rolled out its first full budget proposal, Office of Management and Budget Director Mick Mulvaney said climate spending has often been wasteful.

"I think what you saw happen during the previous administration is that the pendulum went too far to one side, where we're spending too much of your money on climate change, and not very efficiently," Mulvaney said when asked about climate science spending.

Spending for climate science is significantly reduced in Trump's budget across multiple agencies, including the Environmental Protection Agency (EPA), which would see an overall 31 percent cut. The Hill's Timothy Cama reports: http://bit.ly/2qSZzN5.

GOP skeptical of Trump plan for paid parental leave: Republicans appear skeptical of President Trump's proposal to spend $19 billion over the next 10 years on paid parental leave.

"I've always had concerns about more federal mandates on employers," Sen. Lindsey Graham (R-S.C.) told The Hill. "I can think of a million things that are good for employees, that are important in people's lives. The question for me is how many jobs do you lose?"

Graham said it's a "worthy endeavor" to provide assistance to people who recently had a baby, but "you have to look at the economic impact it'll have on hiring."

The budget request Trump released Tuesday calls for spending $19 billion over 10 years to require that states provide parents and adopted parents six weeks of paid parental leave as part of unemployment benefits. The idea has been championed by first daughter Ivanka Trump.

The figure in the budget is less than the $25 billion that Mick Mulvaney, the director of the Office of Management and Budget, initially said the plan would cost on Monday: http://bit.ly/2qT3WaL.

More budget links:

GOP senators bristle at Trump's Medicaid cuts http://bit.ly/2qTjhYY

Trump budget kills program meant to boost US tourism http://bit.ly/2q91VZa

Budget's oil provisions divide Congress, White House http://bit.ly/2qe50Dj

Transportation Department faces cuts under Trump budget


Trump budget getting thumbs down from defense hawks http://bit.ly/2reV5l2

Defense official: Trump budget increase 'not chump change' http://bit.ly/2rOdF0g

Trump budget seeks $1.5B for Homeland Security cyber unit http://bit.ly/2qdZQHb

Trump budget calls for military base closures


Trump budget makes heavy cuts to science research http://bit.ly/2rf6MrR

Trump's $5.8 billion cut to NIH encounters swift opposition


Dem senator posts photo of Trump budget in recycling bin


Trump backtracks on cuts to anti-drug office



Write us with tips, suggestions and news: slane@thehill.comvneedham@thehill.comnjagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill@NJagoda and @NivElis