Offbeat Trump calls on Congress to pull back $15 billion in spending, including on children’s health insurance program
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President Trump is sending a plan to Congress that calls for stripping back more than $15 billion in previously approved spending, with the hope that it will temper conservative angst over ballooning budget deficits.
Almost half of the proposed cuts would come from two accounts within the Children’s Health Insurance Program that White House officials said either expired last year or aren’t expected to be drawn upon. Another $800 million in cuts would come from money created by the Affordable Care Act in 2010 to test innovative payment and service delivery models.
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Those are just a handful of the more than 30 programs the White House is proposing to Congress for “rescission,” a process of culling back money that was previously authorized. Once the White House sends the request to Congress, lawmakers have 45 days to vote on the plan or a scaled-back version of it through a simple majority vote.
If approved by Congress, the reductions would represent less than 0.4 percent of total government spending this year.
A senior administration official said Democrats should recognize that much of this package represents untapped accounts, and that cutting the money would create savings without affecting operations.
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Republicans say it's a good bookkeeping. Democrats say it's robbing the poor. Who's right?Republicans say none of the money being cut was going toward helping children and that their plan would just strike money that has been approved but is not being spent on a specific program. Democrats are accusing Republicans of trying to cut a program that provides health insurance for 9 million children in the United States, many of whom live in poverty.
But Democrats have said they are watching the process with skepticism. Many Democrats have called for expanding programs like CHIP, not cutting them, and they are often fiercely protective of anything related to the Affordable Care Act.
White House officials and GOP leaders believe this package of proposed cuts could begin to signal to conservatives that they are now taking steps to reverse a free-spending fiscal approach they embraced since Trump took office.
Conservatives erupted in March after Trump signed a $1.3 trillion spending package that included a number of budget requests from Democrats, and pushed for a “rescission” package to pare it back by $30 to $60 billion.
But Majority Leader Mitch McConnell (R-Ky.) and others argued that would amount to going back on a bipartisan deal. The spending bill would not be touched in the package the White House plans to send to Congress this week. Instead, the White House plans to follow up with another request for close to $10 billion in additional spending cuts later this year that would target some of that money.
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Republicans must agree to a new spending deal with Democrats by Sept. 30 or it will trigger a government shutdown, something Trump said last week he would embrace if he doesn’t get additional money to build a wall on the Mexico border.
Congress can “rescind” money it has previously authorized if it secures a majority of votes in the House and then the Senate using powers under the Congressional Budget and Impoundment Act of 1974.
The law hasn’t been used in this way in roughly 20 years. The senior administration official said this is the biggest rescission request that has ever been sent to Congress.
The proposed cuts to CHIP would come in part from cutting $5 billion from an account meant to reimburse states for additional expenses in 2017. Because the money wasn’t used last year, it can’t be used this year, the senior administration official said, but it remains on the government’s balance sheet because it was approved by Congress.
CHIP is a program created and reauthorized by Congress that provides health care to low-income children. Congress extended the program for six years several months ago.
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The White House’s other proposed cut to CHIP is a $2 billion reduction that pares back contingency funds set aside in case states see higher than expected enrollment, the senior administration official said. They aren’t expecting to see a jump in enrollment, though, in part because the economy is improving.
Other reductions would come from a range of areas. They include cutting $133 million for a railroad unemployment program that expired in 2012, the senior administration official said.
Successfully pushing these changes through Congress could placate conservatives and put Democrats on the spot about cutting spending. A number of Senate Democrats are running for reelection in states Trump won easily in 2016, and they will likely need support from Trump voters to win reelection.
Republicans control a large majority of votes in the House of Representatives, but their margin in the Senate is razor thin. They might need support from Democrats to approve the spending cuts, depending on the health of Sen. John McCain (R-Ariz.).
White House Office of Management and Budget Director Mick Mulvaney had originally hoped to design a large rescission package, but he was urged by Speaker of the House Paul D. Ryan (R-Wis.) to start with a narrower set of cuts and then follow up with more requests in a future package.
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The March spending bill led to such outrage among Republicans that just hours before signing it into law, Trump said in a Twitter post that he might veto it. He backed down and said the spending agreement was a necessary compromise to secure more money for the Pentagon, but he vowed to never sign a bill like that again.
He has also demanded that Congress give him the power to use a “line-item veto” on spending bills, which would mean he could simply eliminate any part of a spending package he didn’t want. This was ruled to be unconstitutional by the Supreme Court.
But, in his first 14 months in office, Trump has never enforced a veto threat on spending, and Democrats have repeatedly found ways to win spending priorities by holding out during negotiations.
Through a combination of spending increases and tax cuts, the White House and GOP-led Congress have greatly expanded the budget deficit since President Trump was elected.
The government spent $3.98 trillion and brought in $3.32 trillion in revenue last year, leaving a deficit of $665 billion, according to the Congressional Budget Office. The deficit this year is projected to widen to $804 billion, and then hit $981 billion in 2019. In 2020, the government will record deficits that exceed $1 trillion annually unless changes are made.
With rising interest rates, higher debt levels can prove incredibly costly. Republicans railed about government spending during the Obama administration, but they have been torn since Trump took office, as he has largely shown an indifference to spending restraint.
Last week, as aides prepared the package of spending cuts to offer Congress, Trump was demanding more spending, for example, to build a wall along the Mexico border.
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