Acton Institute Powerblog

Explainer: What you should know about President Trump’s FY2018 budget

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What is the president’s budget?

Technically, it’s only a budget request (and in this case, just a blueprint of a request). The budget request is a proposal telling Congress how much money the president believes should be spent on the various Cabinet-level federal functions, like agriculture, defense, education, etc. (The 62-page budget blueprint can be found here.)

Why does the president submit a budget to Congress?

The Congressional Budget Act of 1974 requires that the President of the United States submit to Congress, on or before the first Monday in February of each year, a detailed budget request for the coming federal fiscal year, which begins on October 1.

Is the outgoing or incoming president required to submit the budget?

The Constitution requires each new Congress to convene on January 3 and the incoming president to take office on January 20. Prior to 1990, that gap required that the outgoing president submit a budget, which his predecessor could change. In 1990, the deadline was moved to February. This allowed the outgoing president the option of skipping the process (an option taken by George H.W. Bush, Bill Clinton, and George W. Bush).

If it’s due the first Monday in February, why are we just now hearing about it?

All recent presidents have missed the statutory deadline for budget submissions in their first year in office.

Missing the deadline used to be a rare occurrence. According to the House Budget Committee, “All presidents from Harding to Reagan’s first term met the statutory budget submission deadline in every year.” Reagan and Clinton both missed their deadlines once in eight years. President Obama holds the record for missing the deadline six times in his eight years in office. 

What is the function of the president’s budget request?

The president’s annual budget request serves three functions:

• Tells Congress how much money the president thinks the Federal government should spend on public needs and programs;

• Tells Congress how much money the president thinks the government should take in through taxes and other sources of revenue; and

• Tells Congress how large a deficit or surplus would result from the president’s proposal.

What spending does the president have to request in his budget?

The budget request includes all optional or “discretionary” Federal programs and projects that must have their spending renewed or “reauthorized” by Congress every fiscal year. For example, most defense programs are discretionary, as are programs like NASA, Small Business Administration (SBA) loans, and housing assistance grants. The president’s budget request recommends funding levels for each discretionary program, which totals only about one-third of federal expenditures.

What’s not included in the budget?

Mainly, “entitlement” programs established by Congress, like Social Security and Medicare. Since those programs include mandatory spending, the president does not have to request they be funded for the coming year, though his budget request can recommend new benefits or changes in the level of spending for specific entitlement programs. Entitlement programs comprise about two-thirds of Federal spending.

What happens when Congress receives the president’s budget request?

The House and Senate Budget Committees will hold hearings on the president’s budget request. In the hearings, administration officials are called to testify about and justify their specific budget requests. From these hearings the Budget Committees will prepare a draft of the congressional budget resolution.

The Congressional Budget Act requires passage of an annual “Congressional Budget Resolution”, a concurrent resolution passed in identical form by both House and Senate, but not requiring the president’s signature. The Budget Resolution provides Congress an opportunity to propose its own spending, revenue, borrowing, and economic goals for the coming fiscal year, as well as the next five fiscal years.

Did the president offer a “balanced budget?”

No. In a recent interview President Trump said, “I want a balanced budget eventually. But I want to have a strong military. To me, that’s much more important than anything.”

How much does the president propose to spend?

President Trump proposes to spend $1.068 trillion in discretionary spending (about $4 trillion dollars overall once non-discretionary items are included).

What’s the bottom line on the changes in the recent budget request?

President Trump’s plan would increase:

• Defense spending – 10 percent

• Homeland Security spending – 7 percent

• Veteran’s Affairs spending by 6 percent.

It would reduce spending on the following programs:

• Environmental Protection Agency 31 percent

• State, U.S. Agency for International Development (USAID) and Treasury International Programs – 29 percent

• Agriculture – 21 percent

• Labor – 21 percent

• Army Corps of Engineers – 16 percent

• Commerce – 16 percent

• Health and Human Services – 16 percent

• Education – 14 percent

• Housing and Urban Development – 13 percent

• Transportation – 13 percent

• Interior – 12 percent

• Energy – 6 percent

• Small Business Administration – 5 percent

• Justice – 4 percent

• Treasury – 4 percent

• NASA – 1 percent

• Other agencies – 10 percent

Will Congress pass the president’s budget request in its current form?

Definitely not. Congress has the ultimate say in how tax dollars are spent. Because the priorities of individual legislators differ from those of the president, they’ll shift the spending in various ways.

If Congress isn’t going to pass a budget, why does anyone care about the president’s budget request?

The actual process may be nothing more than legally mandated political theater but the details of the president’s budget request reveal the priorities of his administration (e.g., strengthening the military).

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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