Trump's Revealing Budget: Sensible, Head-Scratching and Draining the Fiscal Swamp of Political 'Untouchables'
THE WALL STREET JOURNAL --
President Trump’s initial budget for fiscal 2018 is a public service, if not exactly in the way he intends. Its main virtue lies in showing voters the painful trade-offs to come if the U.S. doesn’t do something to control entitlement spending.
The “skinny” budget—so-called because a new Administration needs time to offer more details—is being denounced far and wide for cuts to domestic non-entitlement programs. In broad outline the White House wants to add $54 billion in budget authority for defense offset by $54 billion in cuts to every domestic department save Homeland Security and Veterans Affairs.
Critics are portraying these domestic cuts as shocking while Mr. Trump is advertising his defense increases as the largest in history. They’re both wrong. The annual federal budget is now more than $4 trillion, so the White House is proposing to shift a mere 1.35% of that to defense from other priorities. That’s it.
The proposal does represent a sharp change in priorities after the past eight years when President Obama squeezed defense in favor of domestic accounts. Defense spending has fallen to about 3% of the economy from 4.7% in 2010. Domestic discretionary spending boomed until the GOP Congress began to rein it in after fiscal 2011. The number of full-time equivalent federal employees increased even with the GOP limits to an estimated 2.137 million this year from 1.978 million in 2009.
The notion that this is a wholesale, much less cruel, restructuring of the federal government is a fantasy that only Washington would attempt to promote. Take the defense increase, which is welcome but not even close to Ronald Reagan’s buildup.
The proposal is a 10% increase over the 2018 budget cap set by the Budget Control Act. But it is only about 3% above what Barack Obama proposed in his final budget as he tried to neutralize the defense issue during the presidential campaign. Most of this money will meet urgent needs in operations and maintenance to keep planes flying and troops trained and moving. A serious defense budget that begins to meet Mr. Trump’s pledge to build a 350 ship Navy will have to start with the fiscal 2019 budget expected in May.
As for cutting domestic non-entitlement programs, it’s hard to argue that the federal government couldn’t use a top-to-bottom scrub. Would the American people even notice if the Agriculture and Labor departments had to cut their budgets by 20.7%, or Commerce by 15.7%?
Then again, the specific spending proposals are a combination of the sensible and head-scratching. The White House wants to cut $5.8 billion from the National Institutes of Health to $25.8 billion, which is bad policy and puzzling politics. Spending on medical research, especially in this era of biological breakthroughs, is one place where government meets a need the private sector can’t entirely fill. There’s also bipartisan support for NIH, so Congress will spend more anyway.