‘Trumponomics’ of US budget is latest low point for president

America Letter: Taxpayers’ budget has fuzzy maths and will hurt low-income Americans

US office of management and budget director Mick Mulvaney: “We don’t want to measure compassion by the number of programmes we have and the number of people on them.” Photograph: Michael Reynolds/EPA

Anyone who doubts that Donald Trump’s 2018 budget released this week represents anything other than a low point for the current administration should note that the US president happened to be overseas when it was unveiled.

Not a man known for his modesty, the president typically enthuses about appearing before the cameras when there is good news to share. Take, for example, the hastily arranged photo op in the White House rose garden earlier this month after Republicans clinched agreement on the new healthcare plan.

Tired Congressmen were bussed up Pennsylvania Avenue from Capitol Hill to to appear before the cameras alongside a beaming Trump, with the president even delaying his long-awaited first trip back to New York since his election.

As with every federal budget, this week’s proposal announced by the director of the office of management and budget Mick Mulvaney is simply the first step in what will be a protracted process. The House and Senate budget committees will bring forward their own proposals in June, and a compromise budget will eventually be agreed before the fiscal year begins in October.


But the document unveiled on Tuesday reveals a lot about the priorities and capabilities of the Trump administration.

Astonished economists

The immediate reaction to the budget from economists was one of astonishment. Respected Harvard professor and former treasury secretary Larry Summers wrote in the Washington Post that the budget contained "the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them".

The accusation? The Trump team had based its pledge to achieve a balanced budget in 10 years by assuming its ambitious tax cuts policies will boost growth, but without including the cost of those tax cuts to the exchequer. Specifically, the administration argues that its tax reform plan will raise US economic growth to 3 per cent of gross domestic product – itself a highly ambitious assumption – without factoring in the effect of a massive cut to tax revenues on the exchequer.

But while the arithmetic underpinning the budget plan stole most of the headlines this week, the details of the budget proposal reveals the true politics of an administration willing to take measures that will have a detrimental impact on the very low-income Americans who helped propel Trump to the White House.

Much of the budget bears the marks of Mick Mulvaney, who was elected to Congress as a Tea Party candidate in 2010 and has long preached a conservative fiscal agenda.

Payers not recipients

Articulate and enthusiastic, he briefed reporters this week on the content of the budget, arguing that it was a “taxpayers’ budget”. “This is the first time in a long time that an administration has written a budget through the eyes of the people who are actually paying the taxes” rather than recipients, he said.

The main spending headlines of the $4.1 trillion budget are a $54 billion, or 10 per cent, increase in defence spending to “restore America’s military might to defend our interests at home and abroad”, and a $2.6 billion rise in border and defence spending, including $1.6 billion for a Mexican border wall.

In terms of cuts, while the budget largely keeps in place social security spending and Medicare, the health system for older people, it includes a proposal to slash Medicaid, the healthcare assistance programme for low-income people.

As well as affecting access to healthcare, this will also impact on the provision of social services such as opioid addiction supports to help the deepening addiction crisis in many rust-belt states. Several welfare programmes are to be cut, according to the plan, including the food stamp programme which will be cut by $193 billion over the next 10 years, and a reduction of $72 billion for a range of disability programmes.

Social security

The White House is also proposing that eligibility for claiming benefits, including child tax credits, be tightened with recipients required to show a social security number. Similarly, some regional programmes designed to help highly disadvantaged rural areas are in line for cuts, as well as subsidies for college loans.

It is not hard to see that the proposed 2018 budget disproportionately impacts the lower-income, rural voters who voted for Trump.

Mulvaney defended his budget, arguing that “Trumponomics” was about getting people back to work. “We don’t want to measure compassion by the number of programmes we have and the number of people on them – true compassion is the number of people we want to try to get off of those programmes and get back in charge of their own lives.”

Whether that promise will be enough for the millions of Americans who placed their hope in Trump remains to be seen.