With its second budget, the US President Donald Trump will try to keep up the promise of increasing military spending as well as building a wall along the Mexico border, despite fears that it could lead to a new increase in the country’s deficit.
The Fiscal 2019 project, due to be published later today, includes two main elements – 18 billion USD over two years to meet the promised construction of a wall along the Mexico border and 200 billion USD for infrastructure projects . The government will provide joint financing of infrastructure projects of the states, aiming to stimulate investment for 1.5 trillion USD over ten years. The new projects will be conducted jointly with state, local and private partners.
Costs in the new budget will include 23 billion USD for border security and immigration.
The Office also states that the project also provides for cuts that should reduce the country’s deficit by 3 billion USD over ten years.
“The Budget brings us back to balance. He is pushing us off trillions dollar deficits”, said the Director of the Office of Management and Budget, Mick Mulvaney.
However, according to some non-governmental organization, such as the responsible federal budget committee, the deficit would increase to more than 1 trillion USD in 2019.
Even before its release, the budget is outdated after last week Trump signed an agreement approved by Congress that, within two years, domestic spending would rise by 300 billion USD. This, according to the publication, means that the White House based its plan on obsolete data.
However, the Office of Management and Budget states that they intend to make amendments so that the new expenditure is reflected.
The expectations are that the main debates around the budget will focus on the deficit, mainly because of the tax reform adopted in December, as it does not provide for a corresponding reduction in expenditure, but rather relies on the argument that lower tax rates will lead to increased economic growth. According to the analysts the budget will include a number of economic forecasts, relying heavily on the calculations that the country’s economy will continue to grow at a rapid pace in the near future.
Larger items in the budget are 165 billion USD of defense and 131 billion USD in other domestic civilian expenditures. Also 13 billion USD is projected to be spent on fighting the opiate crisis in the country, and 85.5 billion USD are spent on healthcare for veterans.