The Budget: Ten-penny plan
The White House proposes eye watering budget cuts
During his campaign for the White House, Donald Trump touted a “penny plan” for government spending.
This meant cutting the part of the budget that funds day-to-day operations—ie, excluding Social Security, health care, debt interest or defence—by 1% a year.
Critics said such cuts were unachievable.
Department budgets are already beneath their historical average as a share of the economy.
They would have to shrink by nearly a third over a decade, after accounting for inflation, to satisfy the penny plan.
That has not deterred Mr Trump.
On February 27th the White House announced its headline budget numbers, ahead of a more detailed plan due to appear soon.
In his first year in office, Mr Trump is proposing to cut so-called “non-defence discretionary” spending not by 1%, but by more than 10%, relative to current law.
The $54bn (0.3% of GDP) this would free up would flow to the defence budget.
Cue incredulity. The part of the budget Mr Trump would cut, which funds things like education, housing and national parks, has already fallen by over 10% in real terms since 2010.
Strict spending limits in the Budget Control Act of 2011, sometimes called the “sequester”, caused the dive.