Trump slashes foreign aid, cuts safety net programs in new budget proposal

US President Donald Trump will propose on Monday a 21% cut in foreign aid and slashes to social safety-net programs in his $4.8 trillion budget proposal for fiscal 2021, according to senior administration officials.

The budget would spend cash to fund infrastructure projects and defense, but would also raise funds by targeting $2 trillion in savings from mandatory spending programs in the usa. It assumes revenues around $3.7 trillion.

Trump, a Republican, sought in his budget proposal this past year to slash foreign aid but faced steep resistance from Congress and didn't prevail.

The president’s latest blueprint for administration spending proposals is unlikely to be passed by the Democratic-controlled House of Representatives, particularly within an election year.

Trump, who campaigned for the presidency in 2016 on a promise to create a wall along the U.S. border with Mexico, will seek $2 billion in funding for further construction on that project, substantially less than the $8.6 billion he requested a year ago.

Through the 2016 campaign, Trump said Mexico would pay for the wall, which it has refused to do.

The administration shifted resources from the military this past year after Congress refused Trump’s initial wall funding request. The White House will not seek further funds from the military for the wall, a senior administration said.

The budget seeks money to invest in a U.S. infrastructure overhaul that both Democrats and Republicans have said is important. The two sides are unlikely to acknowledge any major legislation this year, though, because they fight for control of the White House and Congress in the November elections.

The budget would raise military spending by 0.3% to $740.5 billion for fiscal-year 2021, starting on Oct. 1 and propose higher outlays for defense and veterans, administration officials confirmed.

But former Chairman of the Joint Chiefs of Staff Mike Mullen raised concerns about how exactly the foreign aid cuts would affect the U.S. civilian footprint all over the world that helps decrease the dependence on military intervention.

“Within an era of great power competition, cutting these critical investments will be out of touch with the truth all over the world,” he wrote in a letter to top congressional leaders. “That is a moment when more investment in diplomacy and development is necessary not less.”

Trump’s foreign aid proposal seeks $44.1 billion in the upcoming fiscal year, weighed against $55.7 billion enacted in fiscal 2020, an administration official said.

SPENDING CUTS

The White House proposes to slash spending by $4.4 trillion over 10 years.

In the fiscal-year 2021 budget, that could include $130 billion from changes to prescription-drug pricing for the Medicare program for older Americans, $292 billion from cuts in safety-net programs - such as work requirements for the Medicaid program for the indegent, and food stamps - and $70 billion from clamping down on eligibility rules for federal disability benefits. Those changes are likely to spur Democrats’ ire.

Deficits would remain high but eventually drop.

The U.S. government ended fiscal 2019 with the most significant budget deficit in seven years as gains in tax receipts were offset by higher spending and growing debt-service payments, the Treasury department said on Friday.

The budget forecasts $4.6 trillion in deficit reduction over a decade and assumes financial growth will continue at an annual rate of roughly 3 percent for a long time to come, officials said. Trump has taken credit for the effectiveness of the U.S. economy, thanks in part to tax cuts he championed and Congress passed earlier in his term. The budget funds an extension of these cuts over a 10-year period with $1.4 trillion.

Aid to Ukraine would remain at its 2020 levels beneath the new foreign aid proposal. Trump was acquitted the other day of impeachment charges that he withheld aid to Ukraine to spur Kiev to research political rival Joe Biden, a Democratic presidential applicant and former U.S. vice president.

Administration officials told Reuters that Trump would request a rise in funding for the U.S. International Development Finance Corporation (DFC) to $700 million from $150 million the prior year, an attempt to counter developing economical threats from China and Russia.

The budget also proposes $1.1 billion for cybersecurity efforts by the U.S. Department of Homeland Security.