Trump's budget director defends plans to cut social programs

Mulvaney, a tea party favorite who until February represented SC in the House of Representatives, got an earful not only from Democrats but also fellow Republicans over the size of the reductions President Donald Trump proposed in his $4.1 trillion 2018 budget.

Mulvaney's appearance on Capitol Hill is just one of four planned for Wednesday, as Trump Cabinet officials, including Treasury Secretary Steven Mnuchin, Education Secretary Betsy DeVos, and Agriculture Secretary Sonny Purdue, also will testify before House panels to defend the president's budget.

"It's a taxpayer-first budget", Mulvaney said. He called the assumption at odds with the historical record - pointing out that the current economic expansion of 94 months has already long outstripped the average American economic expansion: "But what you presume in this budget is not only will we not have a recession - though we're in the third-longest economic expansion in history - but it's going to keep going for another 214 months".

The proposal reflects a conservative vision of smaller government, a drastic rollback of programs for the poor and disabled to prod them into the workforce and a robust hike for the military and border security. It foresees an overhaul of the tax code, which analysts say could direct most of its benefits to upper-income earners. "While members of Congress have expressed concerns with the budget as a whole, we haven't seen many declare which elements of the budget they are committed to protecting". A report by the International Monetary Fund last month projected that while the USA economy will expand at a faster pace this year and next than it did in 2016, that growth is forecast at 2.3 percent and 2.5 percent, respectively, for the next two years. Mexico emphatically rejects that notion.

Some Republicans don't seem too fond of President Donald Trump's budget plan.

-The Poor: Trump's budget would slash Medicaid and the Children's Health Insurance Program by $616 billion over the next decade. All federal programs should be continually evaluated for effectiveness and affordability, and that must include Social Security and Medicare, regardless of the politics.

Trump's budget is simply a proposal. They're not mere savings.

The president's budget "needs to be taken seriously because it is similar in architecture to what House Republicans have voted on in the past", said Lauren Necochea, director of the Idaho Center for Fiscal Policy.

"While providing a path toward a balanced budget and increasing support for our military is commendable, neither can be done overnight, nor by eliminating programs that directly benefit the commonwealth", U.S. Rep. Glenn Thompson, R-Pa., said.

The proposed budget, for the fiscal year that begins October 1, was being delivered to Congress Tuesday, setting off an extended debate in which Democrats are already attacking the administration for trying to balance the budget on the backs of the poor. "They can do 3.5 percent to 4 percent if they get the tax cuts through ASAP". "Come on. That doesn't add up".

Mulvaney also told the panel it will take cuts to Social Security and Medicare to balance the budget in the future.

The budget also slashes funding for other low-income assistance programs, the State Department, worldwide aid and the Department of Education. Dick Durbin of IL. Some $200 billion in federal infrastructure investments are promised to leverage another $800 billion in private investment, though the idea has yet to get much traction.

The net effect on interest rates would be complex, hinging on whether government deficits do in fact decline as the administration contends - a fact that would offset the higher cost of issuing new bonds - and how the higher interest rate environment affects economic growth.

Trump and his administration said the cuts being made to various programs will promote faster economic growth. Without more than $2 trillion in such "economic feedback" over the coming decade, the nation's budget would never reach balance and would run a deficit of nearly $500 billion.

That transparent gimmick has been roundly mocked by economists, with former Treasury Secretary Larry Summers calling it "the most egregious accounting error in a presidential budget in the almost 40 years I have been tracking them".

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