Trump's $4.7 trillion budget relies on strong growth

WASHINGTON -- President Donald Trump proposed a record $4.7 trillion federal budget for 2020 on Monday, relying on optimistic 3.1 percent economic growth projections alongside accounting shuffles and steep domestic cuts to bring future spending into promised balance in 15 years.

The deficit is projected to hit $1.1 trillion in the 2020 fiscal year, the highest in a decade. The administration is counting on robust growth, including from the Republican tax cuts -- which Trump wants to make permanent -- to push down the red ink. Some economists, though, say the bump from the tax cuts is waning, and they project slower growth in coming years. The national debt is $22 trillion.

Even with his own projections, Trump's budget would not come into balance for a decade and a half, rather than the traditional hope of balancing in 10.

Presidential budgets tend to be seen as aspirational blueprints, rarely becoming enacted policy, and Trump's proposal for the new fiscal year, which begins Oct. 1, sets up a showdown with Congress over priorities, including his push for $8.6 billion to build the U.S-Mexico border wall.

Titled "A Budget for a Better America: Promises Kept. Taxpayers First," Trump's proposal "embodies fiscal responsibility," said Russ Vought, the acting director of the Office of Management and Budget.

Despite the large projected deficits, Vought said the administration has "prioritized reining in reckless Washington spending" and shows "we can return to fiscal sanity."

Perhaps most notably among spending proposals, Trump is reviving his border wall fight. Fresh off the longest government shutdown in history, his 2020 plan shows he is eager to confront Congress again over the wall.

Speaking on CNBC on Monday, Vought confirmed the $8.6 billion border request. He said "the border situation is deteriorating by the day" with "record numbers of apprehensions."

An administration official said Trump's budget proposes increasing defense spending to $750 billion -- and building the new Space Force as a military branch -- while reducing non-defense accounts by 5 percent, with cuts recommended to economic safety-net programs used by many Americans. The $2.7 trillion in proposed spending cuts is higher than any administration in history, they say.

The budget includes work requirements for those receiving food stamps and other government aid as part of the $2.7 trillion in non-defense cuts over the decade.

The plan sticks to budget caps both parties have routinely broken in recent years. To stay within the caps, the budget shifts a portion of the defense spending, some $165 billion, to an overseas contingency fund, which some fiscal hawks will view as an accounting gimmick.

Conservatives railed for years against deficits rising during the first years of Barack Obama's administration as tax revenue plummeted and spending increased during the Great Recession.

By refusing to raise the budget caps, Trump is signaling a fight ahead. The president has resisted big, bipartisan budget deals breaking the caps -- threatening to veto one last year -- but Congress will need to find agreement on spending levels to avoid another federal shutdown in the fall.

The Democratic chairman of the House Budget Committee, Rep. John Yarmuth of Kentucky, called the proposed cuts to essential services "dangerous." He said Trump added nearly $2 trillion to deficits with the GOP's "tax cuts for the wealthy and large corporations, and now it appears his budget asks the American people to pay the price," the Democrat said.

While pushing down spending in some areas, including the Environmental Protection Agency, the proposal will seek to increase funding in others to align with the president's priorities, according to one official.

The administration will invest more than $80 billion for veterans services, a nearly 10 percent increase from current levels, including "significant" investments in rehabilitation, employment assistance and suicide prevention.

It will also increase resources to fight the opioid epidemic with money for prevention, treatment, research and recovery, the administration said. And it seeks to shift some federal student loan costs to colleges and universities.

The proposal will also include $1 billion for a child care fund seeking to improve access to care for underserved populations, a White House official confirmed. The one-time allocation is championed by the president's daughter Ivanka Trump, who has focused on economic advancement for women in her role as a White House adviser.

It also provides $200 billion toward infrastructure, much lower than the $1 trillion plan Trump once envisioned. The plan states the money would be leveraged with private dollars, but Congress has largely panned that approach.

White House economic adviser Larry Kudlow said Trump's budget "points a steady glide path" toward lower spending and borrowing as a share of the nation's economy. He also told "Fox News Sunday" there was no reason to "obsess" about deficits, and expressed confidence economic growth would top 3 percent in 2019 and beyond. Others have predicted lower growth.