The President’s Budget: What You Need to Know

By The Policy Circle Team

Last week, President Trump released the Budget for America’s Future, his administration’s proposal for Fiscal Year 2021. The $4.8 trillion budget details spending increases balanced by spending cuts to eliminate annual deficits by 2035 and generate $4.4 trillion in savings by 2030. 

Addressing Wasteful Spending 

One key area the President’s proposed budget addresses is wasteful spending in the form of improper year-end waste and improper payments from the federal government. According to a Congressional Research Service report from July of 2018, the federal government made $1.2 trillion worth of improper payments between FY2004 and 2017, including $500 billion in improper Medicare payments and $230 billion in improper Medicaid payments since FY2004. Open the Books investigates spending at the local, state, and national level, and has documented hundreds of examples of taxpayer abuse

Components of Federal Spending, Fiscal Year 2019

The majority of the fiscal savings in the proposal come primarily from changes in mandatory spending, which includes Medicare, Medicaid, and Social Security. As outlined in The Policy Circle Brief on the Federal Debt, mandatory spending makes up the bulk of our country’s spending. Our nation’s debt grew to over $23 trillion at the beginning of 2020, meaning the debt is larger than the U.S. GDP of $21.7 trillion


The request for funding is put together by federal agencies and the President’s Office of Management and Budget each year. The president’s proposal is not set in stone; Congress – particularly the House of Representatives – holds the so-called “power of the purse,” and all budgets need to pass both the House and the Senate. Still, the budget proposal is important. It signals to Congress the president’s recommendations for how much the government should spend and how much it should collect in revenue. Frequently, this also indicates an administration’s priorities in terms of federal programs, and any potential changes to the tax code. Overall, the budget proposal outlines the president’s path to fiscal responsibility and reducing the federal debt

High federal deficits and debts emerged in the United States during the Great Depression and World War II. Since the late 1960s, though, a more troubling phenomenon has emerged: persistent deficits that occur even in years when the country is at peace and is enjoying economic growth. The emergence of large deficits in modern times coincides with the creation of Medicare and Medicaid and the expansion of Social Security–programs called “entitlements” because they are not subject to annual budgeting. Instead, they grow on autopilot. As the entitlements have grown, the percentage of spending that is subject to the regular budget process has steadily shrunk while the federal government has grown ever more bloated. Government programs often don’t yield the results expected in an efficient manner and are becoming increasingly unaffordable.
Go beyond the headlines, and plan your next Policy Circle meeting to discuss  The Policy Circle Brief on the Federal Debt  or The Policy Circle Brief on Entitlements.  Remember to post a recap of your discussion on your Circle page.

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