President Donald Trump on Monday affirmed his plans for a major build-up in defense, national security, and anti-crime efforts and vowed to offset those hundreds of billions of dollars in new costs by making deep cuts throughout the rest of the federal budget. But Treasury Secretary Steve Mnuchin says that Trump intends to make good on his campaign promise not to go after Social Security, Medicare and other entitlement programs.
A Trump “budget blueprint” being released today would add $54 billion in defense and security funding next year while cutting that amount from "lower priority programs" across government agencies, according to the administration. That 10 percent increase would bring total spending on personnel, military hardware, and other defense contracts to at least $603 billion in fiscal 2018.
“We’re going to do more with less and make the government lean and accountable to the people,” Trump told a gathering of the nation’s Republican and Democratic governors at the White House. “We can do so much more with the money we spend. With the $20 trillion in debt, the government must learn to tighten its belt – something families all across the country have had to learn to do, unfortunately.”
The administration has signaled that this will mean, for example, deep cuts in the Environmental Protection Agency (EPA), the State Department, foreign aid, the Corporation for Public Broadcasting, the National Endowments for the Arts and the Humanities, AmeriCorps, the Export-Import Bank and dozens of other long-standing and popular domestic programs.
But for the time being, at least, the Trump budget plan that the president will outline during his first address to a joint session of Congress Tuesday night will leave untouched entitlement programs that constitute the major drivers of the nation’s mounting debt.
Trump talked about repealing and replacing the Affordable Care Act and pressing for an “historic” increase in defense spending to “rebuild the depleted military of the United States of America” during dangerous times abroad and at home.
Related: Prospects Dim for Deficit Control as Trump Drives for Defense Buildup
Mnunchin declared over the weekend that talk of cutting or revamping Social Security and Medicare, the premier federal programs for providing income security and health care to seniors and retirees, is off the table as far as the president is concerned.
Asked by Maria Bartiromo of Fox Business News on Sunday whether the Trump administration “needs to hit entitlements sooner rather than later” with the national debt on the cusp of $20 trillion, Mnuchin replied: “We are not touching those now. So don’t expect to see that as part of this budget. We are very focused on other aspects, and that’s what’s very important to us. That’s the president’s priority.”
If that proves to be the case, then Trump will have made good on a campaign promise to protect federal programs designed to help the elderly and low-income Americans from budget cuts. “I am going to protect and save your Social Security and your Medicare,” Trump declared two days before the November election in Sioux City, Iowa. “You made a deal a long time ago, a long time ago” to pay into the system.
This was Mnunchin’s strongest statement on the topic to date. The former Wall Street banker and hedge fund manager skirted describing the types of spending cuts the administration was preparing to make during his Senate confirmation hearings. However, conservative Republican Rep. Mick Mulvaney of South Carolina, the new director of the Office of Management and Budget, insisted during his confirmations hearings that he would push for Social Security and Medicare reforms, according to The Hill.
Mulvaney in fact once called Social Security a “Ponzi schemes” that requires overhauling. And former GOP Rep. Tom Price of Georgia, the new secretary of health and human services, previously supported transforming Medicare into a voucher-type program for future recipients.
Precisely how Trump intends to mount a major buildup of the military, build a wall along the southern border with Mexico, bolster the ranks of border patrol and immigration agents, slash taxes and leave entitlements intact without driving up the debt even more remains to be seen.
William A. Galston, a senior fellow at the Brookings Institution, told The Fiscal Times last week that Trump’s “budgetary logic” is dangerously similar to that of the Reagan administration, which pursued a big defense buildup and tax cuts, only to touch off nearly two decades of struggle to contain rampant deficits -- including major cuts in social safety-net programs.
Howard Dean, the former Vermont governor and Democratic Party leader, said today on MSNBC that for him and average Americans, Trump’s budget math “doesn’t make sense.”
The non-partisan Congressional Budget Office has repeatedly warned that the government is on track to return to an era of massive, trillion-dollar-a-year deficits and historic levels of debt as a share of the national economy absent changes in the existing entitlement programs.
Social Security, Medicare, and Medicaid for low-income people accounted for nearly $1.8 trillion of the government’s $3.9 trillion in spending in 2016, according to the CBO. Moreover, with the number of people 65 and over projected to increase by a third over the coming decade, Social Security and Medicare spending is slated to increase to 42 percent of total government outlays by 2027.
The leadership of the Committee for a Responsible Federal Budget, an anti-deficit group, has called on Trump to discuss the importance of the national debt during his first address to a joint session of Congress. “Not since Harry Truman has the national debt been so high as a share of the economy for a new president,” said former defense secretary and CIA director Leon Panetta, former Republican Indiana governor Mitch Daniels and former Democratic Rep. Tim Penny from Minnesota.
“President Trump should use the power of the presidency during tomorrow’s address to talk about the danger our debt poses and begin to put a plan forward to fix it,” they added. “A comprehensive growth strategy will be aided by reducing waste and inefficiencies throughout the government, improving the regulatory environment, pursuing fiscally-responsible pro-growth tax reform, containing rising health care spending, and making Social Security solvent.”