Trump demands 5% cuts across government – bar defence

By on 21/10/2018 | Updated on 24/09/2020
"I'm going to keep that at $700 billion – defence. Okay?" President Donald Trump issues all departments with 5% budget cuts within the month but is adamant that the Department of Defense gets to keep it's full spend.

US President Donald Trump this week asked all government departments to plan for budget cuts of 5%, though he said a recent boost to spending at the Department of Defense will remain intact.

Speaking before this month’s cabinet meeting, Trump dubbed the proposal the “nickel plan” – an allusion to the recently revived ‘penny plan’, proposed by two congressmen, under which government spending would fall by one cent in the dollar every year.

Speaking to departmental leaders, Trump said that he wanted to go further, adding that a 5% cut would save “tremendous amounts of money”.

“I’m going to ask each of you to come back with a 5% budget cut from your various departments. Whether it’s a secretary, an administrator, whatever, I’m going to ask everybody [to arrive] with a 5% cut for our next meeting.” The next cabinet meeting is in a month’s time.

“I think you’ll all be able to do it,” the president continued. “There may be a special exemption, perhaps. I don’t know who that exception would be. If you can do more than five – some of you will say: ‘Hey, I can do much more than five’.”

On how departmental chiefs were expected to cut spending by 5% in a month, Trump said: “Get rid of the fat. Get rid of the waste. And I’m sure you can do it. I’m sure everybody at this table can do it. It will have a huge impact.”

A gap to plug

Trump’s call for departmental savings came two days after the US Department of the Treasury announced the budget deficit in full year 2018 was $779bn: $113bn more than the previous year, but $70bn less than forecast in the full year 2019 Mid-Session Review.

The deficit was 3.9% of gross domestic product, 0.4 percentage points higher than the previous year.

Office of Management and Budget director Mick Mulvaney said: “The president is very much aware of the realities presented by our national debt.

“America’s booming economy will create increased government revenues – an important step toward long-term fiscal sustainability. But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”

The deficit rise follows big tax cuts introduced by the Trump administration, on the basis that reducing taxes would stimulate growth enough to boost government revenues.

Black Hawks before blackboards

However, Trump emphasised the importance of military spending, just two months after approving a defence policy bill authorising a budget of $717bn. That measure included a 2.6% pay raise for troops – the largest in nearly a decade.

Speaking at the cabinet meeting, Trump said: “I made deals with the devil in order to get that done, because we had to improve our military. Our military was depleted. It was in bad shape.

“Our great people in the military hadn’t received a wage increase in more than 10 years. Now they’re getting an increase.”

In fact, the US armed forces have received an annual pay rise for many decades, with Obama approving rises of between 1% and 2.4%.

When quizzed by a reporter on whether the defence budget would be affected by the cross-the-board budget cut, the president said: “We’re building new, incredible submarines, the finest in the world. The most powerful in the world, anywhere, ever.

“We’re doing things that we have never done on this scale. So that included a lot of rebuilding of our military. So despite that [5% cut], I’m going to keep that at $700 billion – defence. Okay?”

About Colin Marrs

Colin is a journalist and editor with long experience in the government and built environment sectors. He cut his teeth in local newspaper journalism before moving to Inside Housing in 1999. He has worked in a variety of roles for built environment titles including Planning, Regeneration & Renewal and Property Week. After a spell at advertising industry bible Campaign magazine, he became a freelancer in 2010. Since then he has edited, local government finance publication and contributed news and features to Civil Service World, Architects’ Journal, Social Housing, management titles and written white papers for major corporate and public sector clients.

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