It's March Madness in Washington
© Getty Images

Welcome to March Madness, not the NCAA basketball championship games, but the annual Washington budget battles. On the same day that the tournament began, the country’s debt clock was reset to nearly $20 trillion and President Trump put forth a budget blueprint.

It is not a realistic budget, however. Normally budgets include underlying economic assumptions, aggregated spending and revenue tables, and debt and deficit figures. A complete budget also provides forecasts for at least the next 10 years. The “Budget Blueprint to Make America Great Again” is one-third of spending for one-tenth of the normal budget window, and therefore is one-thirtieth of a normal budget. We will have to wait for the full game plan until later this spring.

ADVERTISEMENT

In fairness to new White House Budget Director Mick Mulvaney, he had only four weeks to prepare the blueprint after his Senate confirmation. But David Stockman, President Reagan’s budget director, had been on the job only three weeks when he presented his similarly austere budget outline “A Program for Economic Recovery,” which included almost all the basics missing in the Trump plan.

 

So what is in this document released last week? It makes clear that spending for nearly one-third of the budget would be fundamentally rearranged from domestic programs to defense programs. Receiving little attention is what the document proposes for the remainder of this year.

The government is operating under a continuing resolution until April 28, when Congress will have to act on the funding for the remaining five months of this fiscal year. In this short time frame the president proposes to reduce domestic spending by $15 billion (net of $1.4 billion to build a border wall) and to increase defense spending $25 billion. However, the document provides no information on what funding would be reduced, or where the additional $25 billion in defense spending would be specifically allocated. The likelihood of another continuing resolution for the remainder of this year, I believe, remains high.

But the biggest shift in spending priorities occurs next year. The president proposes to reduce federal spending on annually appropriated domestic programs by $54 billion — or about 10 percent of the $519 billion allotted to these activities today — and use all the savings to increase the defense budget by a comparable amount. Also not widely noted, the blueprint would add an additional $77 billion to the defense Overseas Contingency Operations (OCO) account — an account that Mulvaney, when he was a member of Congress, characterized as a slush fund.

Included in the domestic spending area of the budget are the alphabet soup of programs. Agencies like the Internal Revenue Service (IRS), Environmental Protection Agency (EPA), Federal Bureau of Investigation (FBI), Federal Emergency Management Agency (FEMA,) Food and Drug Administration (FDA), National Oceanic and Atmospheric Administration (NOAA), and Transportation Security Administration (TSA) are but a few. But it also includes funding for veterans health programs, highways, housing assistance, education programs, nutrition programs for women and children, and humanitarian aid to foreign governments.

Simple math means that to accomplish his blueprint, and not increase the nearly $500 billion federal deficit next year, the president’s budget has to significantly scale back, rearrange or even eliminate a number of existing programs. The EPA’s funding, for example, would be reduced by 31 percent. The State Department’s budget would be reduced nearly 29 percent.

An alternative to such spending reductions would be for the president to focus on the other two-thirds of federal spending, the so-called entitlement programs. He has, however, already benched the big players — Medicare and Social Security — and at least during the campaign, Medicaid also, although the House healthcare reform bill may have put it back on the floor.

Strict statutory caps were placed on both defense and nondefense domestic spending by the Budget Control Act of 2011. While there would appear to be bipartisan support to increase spending for national security and defense programs, it is not certain that even a Republican-controlled Congress will be willing to fund defense programs at the expense of such drastic cuts in domestic programs. In the past, adjustments to the caps have occurred with an agreement to increase both defense and nondefense by an equal dollar amount.

At the end of the day, with only 52 Republican senators, which is short of the 60 needed to overcome Senate procedural hurdles, the president’s spending for defense likely will be achieved by actually increasing nondefense spending and adding to the federal deficit.

It seems that this partial game plan is particularly dead on arrival, even with a Republican Congress. The final buzzer may not sound until this fall, but threats of government shutdowns, procedural train wrecks, continuing resolutions, debt limit impasses, and spending cap fights will continue. Welcome to March Madness!

G. William Hoagland is senior vice president at the Bipartisan Policy Center, where he helps direct fiscal and health policy analyses. He served as staff director of the Senate Budget Committee from 1985 to 2002.


The views expressed by contributors are their own and are not the views of The Hill.