Regulation, taxes, and spending are all on the chopping block under President Donald Trump’s economic agenda.Days after taking office, Trump signed executive orders putting a temporary halt on all pending regulations (which would be put under review), and required two regulations to be repealed for every new one added.
On taxes, the Trump plan would consolidate the income tax to three brackets (12 percent, 25 percent, 33 percent), more than double the standard deduction, gift and estate taxes would be removed, and the corporate tax rate would be ideally reduced to between 15-20 percent.On spending, Trump is expecting to release a proposed budget on Thursday. According to Trump aides, the budget prioritizes military and homeland security spending while gutting housing, foreign aid, housing, environmental programs, public broadcasting, among other discretionary expenditures.
According to the Washington Post:
President Trump’s budget proposal this week would shake the federal government to its core if enacted, culling back numerous programs and expediting a historic contraction of the federal workforce.This would be the first time the government has executed cuts of this magnitude — and all at once — since the drawdown following World War II, economists and budget analysts said.
The cuts Trump plans to propose this week are also expected to lead to layoffs among federal workers, changes that would be felt sharply in the Washington area. According to an economic analysis by Mark Zandi, chief economist for Moody’s Analytics, the reductions outlined so far by Trump’s advisers would reduce employment in the region by 1.8 percent and personal income by 3.5 percent, and lower home prices by 1.9 percent.
“These are not the kind of cuts that you can accommodate by tightening the belt one notch, by shaving a little bit off of a program, or by downsizing a few staff here or there,” said Robert Reischauer, a former director of the Congressional Budget Office. “These are cuts that would require a wholesale triage of a vast array of federal activities.”
The proposed budget will offset a $54 billion increase in defense spending with a 25 percent cut to the EPA (reducing 19 percent of its staff int he process), a 14 percent cut in the Department of Housing and Urban Development’s budget ($6 billion), and an 18 percent cut in the Department of Commerce’s budget.
The article goes on to say:Administration officials have also stressed that discussions are ongoing between budget officials and agencies, and that the size of the budget cuts remains fluid. Moreover, the cuts cannot take effect unless they are authorized by Congress, which could prove difficult. Lawmakers routinely rebuffed budget requests from President Barack Obama, leading instead to protracted negotiations between both sides.
Despite the massive cuts in the federal workforce, balancing the budget won’t be possible without entitlement reform, and Medicare and Social Security aren’t affected in this budget — unless Congress changes that.
[Note: This post was written by Matt Palumbo. Follow him on Twitter @MattPalumbo12]