"The core of my first Budget Blueprint is the rebuilding of our Nation’s military without adding to our Federal deficit," writes President Donald Trump in his first annual budget proposal here.
"There is a $54 billion increase in defense spending in 2018 that is offset by targeted reductions elsewhere," he summarized. Highlights:
- The Department of Defense budget, already the world's largest national military program, was increased by $52 billion -- 11% -- to $639 billion. Trump seeks tax dollars for "a larger, more capable, and more lethal joint force" to deliver "American superiority not only on land, at sea, in the air, and in space, but also in cyberspace."
Included are funds for LockheedMartin's F-35 fighter jet, Boeing Apache and Sikorsky BlackHawk helicopters, among others. Since those orders were expected, defense stocks were little changed this morning. “The 2018 outline issued this morning is an important step in the government’s effort to craft a budget," Boeing spokesman Todd Blecher told me, noting also that "details may change" in Congress.
- Most civilian agencies face cuts in the 10%-20% range, recalling Ronald Reagan's 1981 budget.
At Agriculture, for example, Trump would kill the Water and Wastewater loan and grant program, for "a savings of $498 million from the 2017 annualized CR level." Water systems in rural communities should look for "private sector financing" aided by EPA state grants, such as the $20 million EPA Water Infrastructure program.
UPDATE: "Reducing federal funds for water/sewer infrastructure could be a positive for Aqua America and American Water Works, since federal “lifelines” are often what enable municipal systems to remain independent;" without subsidies they are more likely to sell to private for-profit companies, veteran utility analyst Ryan M. Connors at Boenning & Scattergood in West Conshohocken told me.
Along with "fair value" legislation like Pennsylania's Act 12, which makes it easier for privately-owned utilities to boost rates to pay for acquisitions even at high prices, "this further increases the likelihood of more privatizations," Connors added. Though other private investors will likely be lending to municipalities that want to upgrade their systems, too. (END UPDATE)
- Despite Trump's proposals to bring back U.S. manufacturing, the budget kills federal funding for the Commerce Department's Manufacturing Extension Partnership program, which pays half the cost of factory assistance centers in Pennsylvania and other states, to save $124 million a year.
While Dow Chemical CEO Andrew Liveris and other Trump manufacturing advisers have recommended more government aid to training and retraining skilled factory workers, Trump's budget summary "decreases Federal support for job training and employment service formula grants, shifting more responsibility for funding these services to States, localities, and employers" -- though it also encourages states to "expand apprenticeship, an evidence-based approach to preparing workers for jobs," without detailing how.
- Despite overall cuts to the Department of Education, the Trump budget "increases investments in public and private school choice by $1.4 billion," boosting the total to $20 billion a year.
This includes funding for public and publicly-funded charter schools, but also $250 million for private school "choice" programs, which could save local taxpayers money, if it keeps private schools in business, including for-profit school operators.
- Bad news for venture capitalists seeking gadget subsidies: The budget would kill a string of Energy Department subsidies to industry, including the Advanced Technology Vehicle Manufacturing Program, "because the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies."
- Utilities will feel more pressure from low-income customers: The budget kills funding for LIHEAP, the Weatherization Assistance Program and other state subsidies for poor electric and gas utility users.
- Bad news for teaching hospitals, including Philadelphia's leading employers such as Penn, Jefferson, Drexel and CHOP: The budget reduces the National Institutes of Health’s (NIH) spending relative to the 2017 annualized CR level, by $5.8 billion, to $25.9 billion. NIH should "focus resources on the highest priority research and training activities."
At the same time, Trump wants to spend an extra $70 million on the Health Care Fraud and Abuse Control (HCFAC), bringing funding for programs to prevent and punish Medicare and Medicaid fraud, by hospitals, consumers and medical practicioners, to $751 million.
The budget cuts more than $400 million from doctors' and nurses' training programs, "which lack evidence that they significantly improve the Nation's health workforce." The government will shift instead to paying more students to commit to "service in areas of the United States where there is a shortage of health professionals" in exchange for taxpayer funding.
- Build the wall: The budget sets aside "$2.6 billion in high-priority tactical infrastructure and border security technology, including funding to plan, design, and construct a physical wall along the southern border" with Mexico to "stem the flow of people and drugs illegally crossing the U.S. borders."
- More for security contractors: $15 million for "mandatory nationwide use of the E-Verify Program, an internet-based system that allows businesses to determine the eligibility of their new employees to work in the United States," plus 100 times as much -- $1.5 billion -- to give Homeland Security the capability to "share more cybersecurity incident information with other Federal agencies and the private sector, leading to faster responses."
Plus $35 million for the FBI and Department of Defense to beef up "biometric identity resolution, research, and development," among other high-tech security measures likely to please Washington-area contractors.
- Cut the State Department budget for the World Bank and other foreign development lenders, for projects that sometimes reward U.S. contractors: "Reduces funding for multilateral development banks, including the World Bank, by approximately $650 million over three years compared to commitments made by the previous administration." The U.S. would remain "a top donor, while saving taxpayer dollars."
The State Department budget also gives Israel $3.1 billion in foreign aid, "an alltime high."
- Amtrak will concentrate on its busiest lines through Philadealphia and other Northeast rail hubs, and state systems like Amtrak's Keystone service in Pennsylvania, while ending "Federal support for Amtrak’s long distance train services, which have long been inefficient and incur the vast majority of Amtrak’s operating losses." New transit will have to be funded locally.
- The budget would also kill the Essential Air Service program to little-used rural airports, saving $175 million.
- More health care spending for veterans: The budget includes "a $4.6 billion increase in discretionary funding for VA health care to improve patient access and timeliness of medical care services for over nine million enrolled veterans."
- Fewer toxic clean-ups: The bill cuts yearly funding for the Hazardous Substance Superfund Account by $330 million, to $762 million
- The solar system, not Earth science: NASA's overall budget is little changed, but the focus has shifted away from studying climate and other systems on Planet Earth, toward Elon Musk-style programs in the local Solar System, that might have private moneymaking potential.
For example: $624 million for aeronautic R&D will help "pave the way for eventual over-land commercial supersonic flights and safer, more efficient air travel;" $1.9 billion for the Planetary Science program will send "a mission to repeatedly fly by Jupiter’s icy ocean moon Europa and a Mars rover that would launch in 2020."
Also, "$3.7 billion for continued development of the Orion crew vehicle, Space Launch System, and associated ground system, to send American astronauts on deep-space missions," while cancelling the Asteroid Redirect Mission.
But also, the NASA bduget would cut $100 million from climate and other Earth-focused science study, "leaving $1.8 billion for a focused, balanced Earth science portfolio that supports the priorities of the science and applications communities," by killing PACE, OCO-3, DSCOVR 44 National Aeronautics and Space Administration Earth-viewing instruments, and CLARREO Pathfinder and other programs to learn more about Earth.