White House’s $4.1 trillion spending blueprint relies on economic growth of 3% by 2021
The primary driver of savings in Mr. Trump’s budget comes from more than $800 billion in cuts to Medicaid, the federal-state health program for the poor, despite a pledge from the president on the campaign trail not to touch the program.
.. Mr. Trump’s budget director Mick Mulvaney said Monday much of the savings will come from changes in the GOP’s health-care overhaul bill, which Mr. Trump supports. But the administration’s budget would cut more than $600 billion from Medicaid and the federal Children’s Health Insurance Program on top of the $250 billion saved from repealing and replacing the Affordable Care Act.
.. Many economists have questioned whether the economy can grow much faster than its current pace without long-term investments in programs that boost worker productivity or help expand the labor force.
.. slash funding for disability insurance by $72 billion. Other spending cuts include $143 billion from changes to student-loan programs, $63 billion in reduced retirement benefits for federal employees, and $38 billion to curb certain farm subsidies.
Trump to propose big cuts to safety-net in new budget, slashing Medicaid and opening door to other limits
Trump’s budget plan would follow through on a bill passed by House Republicans to cut more than $800 billion over 10 years.
.. The Congressional Budget Office has estimated that this could cut off Medicaid benefits for about 10 million people over the next decade.
.. The White House also will call for giving states more flexibility to impose work requirements for people in different kinds of anti-poverty programs
.. Numerous social-welfare programs grew after the financial crisis, leading to complaints from many Republicans that more should be done to shift people out of these programs and back into the workforce. Shortly after he was sworn in, Trump said, “We want to get our people off welfare and back to work. . . . It’s out of control.”
.. In that budget, he sought a big increase in military and border spending combined with major cuts to housing, environmental protection, foreign aid, research and development.
.. The White House also is expected to propose changes to the Supplemental Nutrition Assistance Program, though precise details couldn’t be learned. SNAP is the modern version of food stamps, and it swelled following the financial crisis
.. As the economy has improved, enrollment in the program hasn’t changed as much as many had forecast.
.. An average of 44 million people received SNAP benefits in 2016, down from a peak of 47 million in 2013. Just 28 million people received the benefits in 2008.
.. SNAP already has a work requirement, which typically cuts benefits for most able-bodied adults who don’t have children. But states were given more flexibility during the recent economic downturn to extend the benefits for a longer period
.. the U.S. government spends between $680 billion and $800 billion a year on anti-poverty programs, and considering wholesale changes to many of these initiatives is worthwhile, given questions about the effectiveness of how the money is spent.
.. it could pave the way for states to pursue even stricter restrictions, such as drug tests, that courts have often rejected.
.. In March, the White House signaled that it wanted to eliminate money for a range of other programs that are funded each year by Congress. This included federal funding for Habitat for Humanity, subsidized school lunches and the U.S. Interagency Council on Homelessness
.. a change in the funding for Social Security’s Supplemental Security Income program, which provide cash benefits for the poor and disabled.
.. budget director, former South Carolina congressman Mick Mulvaney
.. A key element of the budget plan will be the assumption that huge tax cuts will result in an unprecedented level of economic growth.
.. these tax cuts would end up creating trillions of dollars in new revenue, something budget experts from both parties have disputed.
.. The tax cuts would particularly benefit the wealthiest Americans, as Trump has proposing cutting the estate tax, capital gains and business tax rates.
.. Robin-Hood-in-reverse
.. there has been a deficit in the United States every year since the end of the Clinton administration
.. “People think government is cheaper than it is because we’ve allowed ourselves to borrow money for a long period of time and not worry about paying it back.”
.. Its premise is that the creation of more wealth will help all Americans succeed, and the Trump administration believes that some anti-poverty programs have created a culture of dependency that prevents people from re-entering the workforce.
.. “I don’t think the Republicans on the Hill are going to feel a strong compulsion to follow the president,” Haskins said. “They are not afraid of him.”
.. the White House is expected to call for $200 billion for infrastructure projects and an additional $25 billion over 10 years for a new program designed by Ivanka Trump that would create six weeks of parental leave benefits.
Don’t Bet against Tax and Health-Care Reform in 2017
Amid all the Russia controversy, Trump and the GOP Congress can get it done.
.. Look, the House has already passed a repeal and replace of Obamacare. And a Senate health-care working group led by Lamar Alexander and Ted Cruz is making progress resolving key issues between moderates and conservatives. There’s no reason why the AHCA can’t become law by the August recess.
And that opens the door for taxes.
.. Representative Peter Roskam, who chairs the tax-policy subcommittee, said this last week: “I’m of the view that 2017 is the year.” He thinks tax reform is easier than replacing Obamacare.
.. So following a markup, Ways and Means can report out a bill. And because prosperity is America’s Number One issue, it will pass the floor relatively easily. And that will put pressure on the Senate to get moving.
.. the very core of the tax bill is a simple three steps:
- a deep corporate-tax-rate cut,
- immediate expensing for new equipment of all kinds, and
- the repatriation of offshore cash.
This is the tonic that will restore capital formation, productivity, real wages, and growth.
Both Senate and House leaders have got to understand how flexible reconciliation is. It can be nearly anything you want it to be. The key player is Senate president Mike Pence, who can overrule the parliamentarian.
.. Treasury Secretary Steven Mnuchin
.. “What I have said repeatedly is that any plan we put forward we believe to be paid for with economic growth.”
.. And lowering marginal tax rates across-the-board, especially on large and small businesses, will foster the mother of all prosperities — the one middle-class Americans in all those red counties that voted for Trump have been yearning for.
An Econ Mystery: Why Did Wages Flatline?
The latest jobs report shows full employment but it hasn’t brought workers higher pay.
Over the past year average hourly earnings have risen by 2.5%. Unfortunately, the consumer-price index, a standard measure of inflation, rose by 2.4%, meaning the average worker’s purchasing power hardly grew at all... Since 2010, hourly wages corrected for inflation have risen at barely 0.5% a year. The official statistics back up reports that Americans are working harder than ever just to stay even.Since the depths of the Great Recession, household incomes have increased steadily—not because wages are rising, but because Americans are working more hours. A longer view reveals the limits of these gains. Nearly eight years after the official end of the recession, median household incomes aren’t much higher than they were when the recession began, and they remain a bit lower than in January 2000. For families in the middle, it has been a lost two decades.
.. Productivity gains have been meager since the end of the Great Recession. But as this newspaper reported last week, profits at S&P 500 companies in the first quarter of 2017 were up nearly 14% over the comparable period a year ago. Firms have gains they could share with their workers, but they have chosen not to do so. Even in occupations where companies complain of labor shortages, there is scant evidence that they are responding by raising compensation.