A president’s budget proposal is many things: a statement of priorities and goals, an agenda, a battlefield map.
But it’s not final, and it’s not law. Only Congress can decide how the nation’s tax revenue will be spent, and how much debt we’ll take on to spend money we don’t have.
White House Budget Director Mick Mulvaney said Trump’s first budget was “written from the perspective of the people who pay for the government.” It aims to raise the nation’s economic growth from its wan current rate of 1.9 percent to a healthier 3 percent over 10 years. “If we do not get to 3 percent growth it is unlikely that we will ever balance the budget again,” he said, calling it “theft” to borrow money with no intention or plan to pay it back.
Trump’s budget assumes $2 trillion in additional revenue over 10 years from the new economic activity that will be generated when and if the economy is growing at 3 percent.
There are many moving parts in Washington right now that will affect the prospects for economic growth. The budget, tax reform and health care legislation are interconnected, with the projected costs of each element affecting the ability to pass one of the others.
Tax reform and health legislation are crucial to achieving the president’s goal, and his signature campaign promise, of rapid job creation. He also promised not to cut Social Security or Medicare, and his budget keeps faith with that vow despite the views of some Republicans in Congress that the programs are unsustainable.
But other cuts in spending have outraged a wide array of affected interest groups, and Congress will likely want to restore most of the funding that Trump’s budget would cut. The president has created leverage to negotiate for something he wants: an increase in the nation’s debt ceiling. In recent months, Mulvaney and Treasury Secretary Steven Mnuchin have been urging Congress to raise the debt ceiling before adjourning in July so that it’s not an…