May 23, 2017
5 Key Takeaways From President Trump’s Proposed Budget
1. The President will indeed balance the budget over 10 years according to the budget released this morning.
- Interestingly, it balances the budget while increasing defense discretionary spending by $54 billion in FY 2018 and lowering non-defense discretionary by $54 billion in FY 2018.
- Over the next ten fiscal years, defense discretionary is increased by $489 billion and non-defense discretionary is lowered by a little over $1.5 trillion.
2. The President’s budget calls for new investments despite the cuts, including a Paid Parental Leave program, an Air Traffic Control Reform, and proposed Infrastructure funding totaling $200 Billion over 10 years.
3. That said, the President’s budget reform programs cut deep, especially on health care reform and entitlement programs.
- Notably, the budget assumes the passage of the House passed American Health Care Act (AHCA) for a total savings of $250 billion over ten years.
- The committee reported AHCA was estimated to save $337 billion over ten years. However, House Leadership included a number of amendments to the bill in order to pass it in the House. OMB’s estimate is those amendments in total cost $87 billion over ten years.
- On top of the Medicaid cuts that are part of AHCA which total $880 billion, the President’s budget proposed to further cut Medicaid by $610 billion.
- The budget’s other cuts include:
- Reduces the Supplemental Nutrition Assistance Program by $190 billion over ten years
- Eliminates the Social Services Block Grant program saving $16.7 billion over ten years.
- Reduces the Temporary Assistance for Needy Families (TANF) by $15.6 billion over ten years.
- Reforms disability programs saving $72.5 billion over ten years.
- Imposes a number of reforms to reduce improper payments saving $142.3 billion over ten years.
- Requires Social Security Number of the parents of children benefiting from the Child Tax Credit and the Earned Income Tax Credit.
4.The Trump Administration’s proposed budget also makes significant changes to student loan programs totaling $272 billion in savings over ten years.
- Eliminates subsidized student loans ($38 billion in savings over ten years)
- Eliminates the Public Service Loan Forgiveness program ($27 billion in savings over ten years)
- Creates single income-driven student loan repayment program ($76 billion in savings over ten years)
5. Finally, the Administration significantly changes Federal agricultural programs totaling $38 Billion in savings over ten years.
- Limits crop insurance premium subsidy to $40,000
- Limits eligibility for agricultural commodity payments to $500,000 in Adjusted Gross Income (AGI)
- Limits crop insurance eligibility to $500,000 in AGI
- Eliminates the Rural Economic Development Program
- Eliminates interest payments to electric and telecommunications utilities
- Imposes new USDA user fees (APHIS, FSIS, GIPSA, AMS) totaling about $6.6 billion in ten years
Rich Meade, a Vice Chairman at Prime Policy Group and Chair of the firm’s Healthcare Practice has over 25 years of experience in legislative, regulatory, political and public relations strategy. He previously served as Chief of Staff to the House Budget Committee. Rich has helped his clients navigate many complex regulatory and legislative landscapes to achieve many public policy successes including transitioning to a new Medicare payment and quality system, and developing, with the Centers for Medicare and Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC), a health information exchange (HIE) on the Nationwide Health Information Network (NwHIN).
Jacob Sztraicher is a member of the Prime Policy Group Research Team. He assists on data projects and a variety of other client work.