alliantgroup’s Dean Zerbe’s Statement on the President’s Budget

The White House recently released its first full budget proposal—and as is the case with all proposed presidential budgets, there is little chance that Congress will adopt the proposal as is, let alone a guarantee that even parts of the budget will see the light of day.

However, presidential budgets are still important as they provide a clear indicator of the White House’s priorities and the policies the administration is likely to pursue. Keeping this in mind, here are a few key takeaways from the president’s budget:

Decreasing Federal Spending is the Main Goal

Above all else, the White House is seeking to reduce federal spending, with the administration’s budget projected to reduce spending by $3.6 trillion over the next 10 years. According to the administration’s budgeting models, the end result would be a balanced budget by 2027.

That is a lofty goal—and one that will likely not happen because of the drastic across the board cuts (and the tough congressional votes) it would require. However, the numbers here do show that the White House is happy to carry the flag for deficit reduction.

Defense and Security are a Priority, Social and Domestic Programs are not

While reducing the federal deficit is a goal, the administration has not only indicated the areas it would prefer to cut to get to its projections—but also the areas where it would like to actually increase spending. While the president’s budget would cut nondefense discretionary spending and many social and domestic programs, it would increase defense spending by $54 billion in 2018.

The take home here is that the administration has set its priorities in where it would like to allocate resources—with a focus on defense and national security and less emphasis on some social and domestic programs.

However, it is worth noting that the budget does not include any cuts for Medicare or core Social Security benefits.

Expect the Administration to Push Hard on Infrastructure

In addition to defense, infrastructure will also be a top priority for the White House. The president’s budget proposes a $200 billion spending increase as a measure to encourage $1 trillion in infrastructure investments, doing so mainly through public-private partnerships.

The White House’s infrastructure push puts the administration at odds with some congressional Republicans. As such, this could be an interesting area for negotiations as GOP congressional leadership pushes forward with its agenda.

The main takeaway in all of this however is that the president will need to lean on Congress to push through his priorities—be it comprehensive tax reform or any of the items discusses above. In the end, the president’s relationship with Congress will determine his ultimate success.