Trump's New Budget Proposal Is Incoherent Yet Immensely Dangerous
Three years of economic policy under the Trump administration are well represented by just a few words: incoherent yet immensely dangerous. First, incoherent. The President promised that his tax cut would pay for itself and super-charge economic growth to a sustainable 3%/year. Instead, the tax cut has cost over $180 billion/year and growth has never come in at 3% or higher during his Administration (and was just 2.3% in 2019). Furthermore, Trump promised that his trade war would revitalize manufacturing and create far more jobs than during the Obama administration. Instead, his tariff policies have led to a deep manufacturing recession and job growth through his first three years is almost 40,000 jobs/month slower than during Obama's second term.
Second, immensely dangerous. As a result of Trump's attacks on Obamacare and his support for new restrictions on Medicaid access in the states, the uninsured rate has begun to rise rapidly after years of declines under Obama. In 2019, almost 8 million fewer people had health insurance than did when Trump took office in 2016. In addition, the sharp decline in pollution of almost 25% from 2009 to 2016 has rapidly reversed under Trump. As a result of his gutting of several major environmental programs such as the Clean Power Plan, emissions have actually increased by over 5% since 2016, a development that his own EPA estimates will cause 1,400 additional deaths per year in the US.
It is fitting then that the budget proposal released by the administration today continues this trend of being implausible yet significantly harmful to the most vulnerable Americans. First, the budget proposal projects economic growth of 3.1% in 2020 and 3%+ every year up to 2024. This is a wildly unrealistic and downright laughable estimate. Growth was 2.3% in 2019, and the IMF and Fed both estimate that it will be just 2% in 2020. Furthermore, the Fed projects that growth will hit just 1.9% in 2021 and 1.8% in 2022, nowhere close to the administration's 3% estimate.
And second, the budget proposal includes significant cuts to the social programs that disproportionately help poor Americans. Trump's proposal would cut Medicaid and food stamps by almost $300 billion and reduce federal disability benefits by almost $100 billion, targeting literally sick, hungry, and disabled Americans. Furthermore, he proposes significantly cutting the budgets of critical future-looking federal departments such as the Environmental Protection Agency by 27% and the Department of Health and Human Services (which funds medical research organizations such as the CDC and NIH) by 9%. For more on NDN's work on economic and trade policy under the Trump administration, please click here.
