On The Money: Inside Trump's budget | Blueprint calls for 5 percent cuts in domestic spending | Boost for defense | Trump asks for $8.6 billion for border wall | Budget projects 3 percent growth ahead | Fed chief says Trump can't fire him

Happy Monday and welcome back to On The Money. 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.

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

 

THE BIG DEAL--Trump releases budget calling for 5 percent cuts in domestic spending:  
President TrumpDonald John TrumpMueller report findings could be a 'good day' for Trump, Dem senator says Trump officials heading to China for trade talks next week Showdown looms over Mueller report MORE on Monday unveiled his 2020 budget proposal, calling for domestic spending cuts of 5 percent across the federal government.

The proposal would raise overall defense spending to $750 billion, up from $716 billion in 2019, while slashing nondefense programs to $567 billion, down from the $597 billion allocated in 2019. The Hill's Niv Elis breaks down the numbers.

 

Battles over nondefense spending: The proposed nondefense spending level is aligned with the cap set in the Budget Control Act, a 2011 law that was meant to force Democrats and Republicans to compromise by setting draconian limits on both defense and nondefense spending.

The proposed cuts to nondefense spending target the departments of State, Agriculture, Education, Health and Human Services, Labor and Transportation, and the Environmental Protection Agency (EPA).

That's why Democrats say the nondefense cut amounts to 9 percent, given that the legal cap will drop to $543 billion, with most of the difference accounted for by emergency disaster relief and wildfire suppression efforts that do not count toward budgetary ceilings approved under the Budget Control Act.

 

A lot more bricks (or slats) in the wall: Trump's latest budget would allocate $8.6 billion to fund his proposed southern border wall, $7 billion more than the president requested in his last budget.

Trump only asked for $1.6 billion for wall funding in his 2019 budget, but boosted his demand to $5 billion and later $5.7 billion in December. Congressional Democrats refused to fork over the cash, Trump declined to sign a bill that didn't meet his request, leading to the 35-day partial government shutdown.

"President Trump hurt millions of Americans and caused widespread chaos when he recklessly shut down the government to try to get his expensive and ineffective wall, which he promised would be paid for by Mexico," said House Speaker Nancy PelosiNancy Patricia D'Alesandro PelosiPelosi, Dems plot strategy after end of Mueller probe Coons after Russia probe: House Dems need to use power in 'focused and responsible way' Trump, Congress brace for Mueller findings MORE (D-Calif.) and Senate Minority Leader Charles SchumerCharles (Chuck) Ellis Schumer4 in 5 Americans say they support net neutrality: poll GOP senator: Trump's criticism of McCain 'deplorable' Schumer to introduce bill naming Senate office building after McCain amid Trump uproar MORE (D-N.Y.) in a statement.

"Congress refused to fund his wall and he was forced to admit defeat and reopen the government. The same thing will repeat itself if he tries this again," they added. "We hope he learned his lesson."

 

IRS funding boost: The proposal called a slight funding increase at the IRS, as the agency faces technology-related challenges and difficulties implementing the GOP's 2017 tax-cut law.

The White House budget request for fiscal 2020 would boost funding at the IRS to $11.5 billion, up from the current level of $11.3 billion. The proposal allocated $290 million of the funds should go toward the agency's multiyear efforts to modernize its information technology.

The IRS has long had technology-related struggles. Last year, it had a systems failure on the tax-filing deadline, involving a relatively new piece of software that resulted in the agency extending the filing deadline by one day. Naomi Jagoda explains here.

 

What comes next: White House budget proposals are little more than messaging documents that reflect the administration's priorities. Congress controls the federal purse strings and lawmakers typically ignore the vast majority of what the president requests unless it already aligns with their own funding plans.

Republicans declined most of Trump's proposed nondefense spending cuts when they controlled the House. The Democratic takeover of the lower chamber makes it even less likely that anything controversial in Trump's budget proposal end up in a funding bill.

 

And to break it all down, our budget reporter Niv Elis has five takeaways from Trump's budget.

 

ON TAP TOMORROW

 

LEADING THE DAY

White House projects 3 percent growth through Trump's presidency: The White House expects the U.S. economy to grow at 3 percent of gross domestic product (GDP) throughout President Trump's tenure, far faster than projections released by several government agencies and economists.

Trump's fiscal 2020 budget proposal, released Monday, includes one of the most optimistic visions of the country's economic future despite mounting signs of an impending slowdown.

The proposal assumes that the U.S. economy will grow by 3.2 percent in 2019, 3.1 percent in 2020 and 3 percent through 2024 -- the final year Trump is eligible to be president. The White House expects the economy to slump to 2.9 percent growth in 2025 and 2.8 percent from 2026 through 2029. I've got more on that here.

 

  • The White House projections for 2019 and 2020 are unchanged from its 2018 estimates for those years. They're also far more bullish than projections issued by the Congressional Budget Office (CBO), Federal Reserve and a slew of private sector economists.
  • Analysts broadly expect the U.S. economy to slow in 2019 as the recovery from the 2008 recession appears to be fading in strength. Economists are also concerned that severe downturns in Europe and China could drag on the U.S.
  • The CBO, the nonpartisan budget scorekeeper for Congress, in January projected the economy to grow by 2.3 percent of GDP in 2019. The Fed in December also projected a 2.3 percent growth rate in 2019 and 2 percent growth in 2020.

 

Fed chief Powell says Trump can't fire him: Federal Reserve Chairman Jerome Powell said in an interview aired Sunday night that he doesn't believe President Trump has the authority to fire him.

When asked during an interview with "60 Minutes" whether Trump could fire the Fed chief, Powell responded "no."

Powell, a Republican, has led the Fed since January 2018 after Trump appointed him to lead the central bank in late 2017. Trump has frequently criticized Powell and the Fed for raising interest rates four times last year and reportedly considered trying to fire the chairman.

The president can appoint members of the Federal Reserve board, but legal experts say it's unlikely that Powell, the head of an independent agency created by Congress, can be fired for anything other than severe misconduct.

"The law is clear that I have a four-year term, and I fully intend to serve it," Powell said, citing the Fed's independence from the White House. I've got more from Powell's interview here.

 

GOOD TO KNOW

  • Democratic lawmakers and taxpayer rights advocates are stepping up their calls for the IRS and Congress to provide more help for taxpayers during a filing season challenged by President Trump's tax law and the recent government shutdown.
  • The Treasury Department on Monday announced sanctions against a Russia-based bank for violating restrictions placed on Venezuela's state-owned oil company.
  • Democrats will make President Trump's 2017 tax law a major campaign issue next year, but there is little consensus within the party about what their alternative should look like or if they should even offer one.
  • The president of the United Auto Workers (UAW) union on Monday said that the group would raise weekly strike pay, according to The Associated Press.
  • A bill from blue-state lawmakers to restore the full state and local tax (SALT) deduction and raise the top individual tax rate would cost $532 billion over a decade and primarily benefit those with high incomes, according to a report released Monday by the right-leaning Tax Foundation.
  • Congress is barreling toward a fight over President Trump's decision to redirect billions in Pentagon funding to construct his proposed border wall.
  • Top White House economic adviser Larry Kudlow said on Sunday that he's "bullish" on the prospects of a U.S.-Chinese trade deal being finalized by April, but acknowledged that a final agreement is up to President Trump.

 

ODDS AND ENDS

  • Health Care Service Corp., which operates Blue Cross and Blue Shield plans in a handful of states, did not pay any federal taxes in 2018 and received a $1.7 billion tax refund, according to its latest financial report.
  • Emergency workers were summoned to U.S. Amazon warehouses 189 times for employees' suicidal attempts and mental breakdowns over the last five years, according to a new Daily Beast report.