Political News

With New Budget Deal, Trump Surrenders to the Administrative State

Posted February 9, 2018 7:38 p.m. EST

WASHINGTON — When the Trump administration rolled out its 2018 budget last year, its “New Foundation for American Greatness” was billed as a road map for President Donald Trump’s deconstruction of the administrative state. Domestic programs prized by Democrats would be cut, the diplomatic corps would be decimated, spending on the military would balloon and a wall would be funded on the southern border.

None of that happened, and when the president signed a far-reaching new budget plan into law Friday, after a brief overnight government shutdown, the administrative state effectively won.

Early Friday morning, Congress passed legislation to lift strict spending caps imposed by the 2011 Budget Control Act by about $300 billion over two years, paving the way for big increases in domestic and military spending and swelling annual budget deficits to at least $1 trillion. Far from cutting programs like environmental protection, biomedical research and foreign aid, the president’s signature ensured their expansion — not just this year but next.

And Monday, the White House will send a 2019 budget request to Congress that has already been overtaken by events. While all presidential budgets are largely political exercises, this one is widely anticipated to be the least relevant in decades.

“This will be largely ignored” by Congress, said Douglas Holtz-Eakin, who was chief economist of President George W. Bush’s Council of Economic Advisers.

Trump’s first budget laid out a profound reorganization of federal priorities, with deep cuts to agencies including the State Department, the Environmental Protection Agency, the National Institutes of Health and the Agriculture Department. Instead, Congress spent the year lurching between stopgap funding measures, extending funding levels set in the Obama years.

Republican and Democratic lawmakers dismissed most of the White House proposals, which Mick Mulvaney, the director of the White House’s Office of Management and Budget, culled from the president’s campaign promises.

Last year’s budget projected the United States would swing from a deficit of $440 billion in 2018 to a surplus of $16 billion in 2027. This week, the nonpartisan Committee for a Responsible Federal Budget projected a deficit of $2.1 trillion that year if the current fiscal and tax policies are made permanent.

And now, Trump’s hands are tied even further. His $1.5 trillion tax cut has been passed, he has promised not to make cuts to the largest entitlement programs, Medicare and Social Security, and Congress has locked in spending levels for military and nonmilitary programs through September 2019. Congressional appropriators have until March 23 to allocate the funds that have been approved by the deal reached this week.

For a president who likes deadline-driven crises, the budget accord could bring an unhelpful peace to Washington. Beyond setting spending levels for two years, it suspends the statutory debt limit until March 2019.

The White House budget office said Friday that in light of the agreement reached in Congress, it would modify its request to reflect the new budget cap levels, backfilling spending to catch up to Capitol Hill. It will also come with an “addendum” that will offer guidance to “account for the increased spending caps in a responsible manner.” Trump’s budget addendum will also include a “limited set” of administrative priorities and ideas for fixing what the administration considers budget gimmicks that it says are being used to circumvent the spending caps.

The budget release will put Mulvaney, a former Republican House member from South Carolina, back in the spotlight. Mulvaney, who was a hard-line deficit hawk in Congress, has at times strained to defend Trump’s deficit-busting policies and the president’s unwillingness to cut the drivers of spending in an aging society, Medicare and Social Security. On Monday, he will have to make the case for even paying attention to the White House budget.

Analysts said it was difficult to see how the White House’s budget could be an influential or even particularly relevant document, given the vast disparity between its line-by-line allocations and the new spending caps set by Congress.

“I just don’t know how you can have a big influence when your totals add up to something so different than what Congress has set,” said Jason Furman, a former economic adviser to President Barack Obama. “This seems even more dead on arrival than it would normally be.”

Furman said he was skeptical that the White House would be able to significantly adjust spending levels in the addendum to the budget, given the complexity of the exercise.

Stan Collender, a former staff member for Democrats on the House and Senate budget committees, said the White House should hold off on releasing a budget rather than release one with irrelevant deficit projections and, he predicted, overly optimistic economic growth estimates.

“Mulvaney will probably come out and say that our budget will achieve balance in 10 years, which will be nonsense,” Collender said.

Collender said budget watchers should pay close attention to the White House’s economic forecasts and how they matched up with those of mainstream prognosticators. Last year, Trump was accused of relying on “wishful thinking” to make his budget balance.

Republicans agreed that the White House would not be able to quickly adjust spending to fill the new caps. But they said the budget could still be useful as a guide to the administration’s priorities, especially since the congressional deal applied to the top line, not to specific programs. “The budget can move the money around within agendas and priorities,” said Jack Kingston, a former lawmaker from Georgia who served on the House Appropriations Committee and is a steadfast defender of Trump. “Having a budget document is an important blueprint on priorities.”

For example, the White House could use the budget to send a message on politically fraught issues like funding public radio. Administrations have also used the budget as a tool to criticize Congress if the White House splits with lawmakers on certain issues.

Trump, who supported the budget agreement reached in Congress, lamented that it included so much “waste” that was needed to secure votes from Democrats. He acknowledged, in a post on Twitter, that he needed more Republicans to win elections for the budget that he envisioned to become a reality.

“Without more Republicans in Congress, we were forced to increase spending on things we do not like or want in order to finally, after many years of depletion, take care of our Military,” Trump said. “Sadly, we needed some Dem votes for passage. Must elect more Republicans in 2018 Election!”