Corporate Finance

Trump Proposes $4.8T Budget

The proposal would cut domestic programs but fail to reduce the deficit below $1 trillion.
Lauren MuskettFebruary 10, 2020
Trump Proposes $4.8T Budget

The Trump administration is proposing a $4.8 trillion budget for the federal government for the 2021 fiscal year, an increase of $700 billion over 2018, though it includes cuts to Medicaid, the Children’s Health Insurance Program, and Medicare.

The budget would cut funding for the Environmental Protection Agency by 26.5% and for the Department of Health and Human Services department by 9%. It cuts Education Department funding nearly 8%, the Interior Department’s budget by 13.4%, and Housing and Urban Development’s funding by 15.2%.

The National Aeronautics and Space Administration budget would increase by 12%. Military spending would increase 0.3% to $740.5 billion.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

The proposed cuts are expected to be rejected by Congress.

White House officials said the budget would eliminate the federal budget deficit by 2035 if the economy grew at 3% per year through 2025. The U.S. economy grew at 2.3% in 2019.

While campaigning for president, Donald Trump said he would eliminate the annual federal deficit and pay off all U.S. debt after eight years in office. During his first year in office, Trump advisers said the deficit would be eliminated by about 2028. This year the budget deficit is expected to exceed $1 trillion for the first time since 2012.

“Trying to balance the budget in 10 years is very difficult, so having a longer time horizon makes a lot of sense,” Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, said. “Fifteen years is still very aggressive.”

In 2016, the last year President Barack Obama was in office, the budget deficit was $587 billion.

The proposed budget would cut foreign aid by 21%, tighten standards for federal disability benefits, and impose work requirements for Medicaid and beneficiaries of the Supplemental Nutrition Assistance Program.

It is expected to request $2 billion in spending for a southern border wall.

Samuel Corum/Getty Images

4 Powerful Communication Strategies for Your Next Board Meeting