GOP Officials: Trump Finalizing Budget With Domestic Cuts

WASHINGTON (AP) — The White House is finalizing a budget blueprint that promises a balanced federal budget within 10 years, doubling down on cuts to domestic agencies and adding a new round of cuts to the Medicaid program for the poor.

Details are sketchy and remain subject to change. But Republican officials on Capitol Hill say President Donald Trump's upcoming budget plan will rely on rosy predictions of economic growth — and the higher tax revenues that would result. The plan also relies on cuts to Medicaid and other so-called entitlement programs such as food stamps to promise a balanced federal ledger.

Trump has long promised that he won't cut Social Security and Medicare benefits. The programs are the pillars of retirement for many seniors — and are politically dangerous to cut.

The White House budget follows the release in March of a partial budget plan that focused on agency budgets for the 2018 fiscal year that starts in October that promised a 10 percent increase in defense spending next year accompanied by equal cuts to domestic agencies and foreign aid. The domestic cuts were widely criticized by lawmakers in both parties and a smaller batch of cuts was ignored last week when Congress wrapped up a long-delayed $1.1 trillion funding bill for the ongoing budget year.

The officials spoke on condition of anonymity to freely discuss private deliberations.

Trump's budget is expected to be released the week of May 22. White House budget office spokesman John Czwartacki would not comment on the plan and cautioned that the measure is still being assembled.

Presidential budgets are mere suggestions and those who draft them — in this case White House budget director Mick Mulvaney — have the advantage of being able to assume they can sweep past political obstacles and get enacted without change. Trump officials such as Treasury Secretary Steven Mnuchin say economic growth of 3 percent or more is possible under Trump's agenda of tax reform, loosened regulations, and infrastructure spending.

Critics are sure to pounce on the budget's rosy predictions of growth and declare its menu of steep, unpopular spending cuts dead on arrival.

"To achieve balance it's going to require some heroic assumptions about both economic growth and unspecified future cuts in discretionary spending, and probably some other optimistic assumptions, to make the numbers work," said budget analyst Ed Lorenzen of the Committee for a Responsible Federal Budget, which advocates for lower budget deficits. Discretionary spending is the more than $1 trillion portion of the budget that Congress passes each year; it has been squeezed already by a 2011 budget deal and there is considerable pressure in Washington to spending more on such programs, not less.

Because Trump promises to exempt Social Security and Medicare benefits from cuts, his budget team has focused on a category of other "mandatory" benefit programs such as retirement benefits for federal workers, food stamps, and Medicaid when scrubbing the budget for cuts.

Medicaid is already a major target in the House-passed Republicans health care bill, which would slash $880 billion from the program over the coming decade.

The top Democrat on the House Budget Committee, John Yarmouth of Kentucky, said that for the upcoming budget to balance, Trump would "have to cut the hell out of some really important mandatory spending and have incredibly rosy revenue projections."