ECN

1. ESPERANZA VARELA
ECN 237.71: PRINCIPLES OF
OF MACROECONOMICS
Trump's Budget Proposal & its
Relevancy to Economics

2. WHY I CHOSE THIS TOPIC
By taking macroeconomics, I was able to relate this topic to
different chapters I learned about. By taking this class at the
same time the U.S. was introducing a new president, I was able
to see his plan from the beginning, see his policies in action and
understand their impact on society and the economy, and see
taught concepts in action.

3. STEPS TO PASSING THE FEDERAL BUDGET:
1. PRESIDENTIAL BUDGET SUBMISSION (DUE IN FEBRUARY)
2. BUDGET RESOLUTION (MAY)
3. BUDGET PASSED & SIGNED BY PRESIDENT (SEPTEMBER)
Federal Budget Process

4. "MYBUDGETBLUEPRINTFOR 2018:
• PROVIDESFOR ONE OFTHE LARGESTINCREASESIN DEFENSESPENDINGWITHOUTINCREASING
THE DEBT;
• SIGNIFICANTLYINCREASESTHE BUDGETFOR IMMIGRATION ENFORCEMENTATTHE
DEPARTMENTOF JUSTICEANDTHE DEPARTMENTOF HOMELANDSECURITY;
• INCLUDESADDITIONALRESOURCESFORAWALLONTHE SOUTHERNBORDERWITHMEXICO,
IMMIGRATION JUDGES,EXPANDEDDETENTIONCAPACITY, U.S.ATTORNEYS, U.S. IMMIGRATIONAND
CUSTOMSENFORCEMENT,ANDBORDERPATROL;
• INCREASES FUNDINGTOADDRESSVIOLENTCRIMEAND REDUCES OPIOIDABUSE;AND
• PUTSAMERICAFIRSTBYKEEPINGMORE OFAMERICA’SHARD-EARNEDTAXDOLLARSHEREAT
HOME."
Trump's Budget Blueprint for 2018

5. THE FEDERAL BUDGET
• Doesn't contain all the details of a full presidential
budget
• "Skinny budget"
• In reality, is just a suggestion
• Even though Republicans control, Democrats have
legislative tools to refute

6. https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-
proposal/?utm_term=.ab2f3ae7a794

7. https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-
proposal/?utm_term=.ab2f3ae7a794

8. Includes:
• Defense
• Education
• Scientific Research
Funding
Does NOT Include:
• Mandatory or Entitlement
Spending
• No Mention of Medicare or
Medicaid
• Interest payment on Federal debt
• Student Loans
• Farm Price Supports

9. QUOTES & OPINIONS
"...unlikely to be popular, even in his own party" - Alice Rivlin
"disturbing disconnect"- Mark Muro
"please the-government wing of congressional Republicans and their most
ideological committed supporters, but it may not play so well with ordinary
Trump voters when they see rural airports close, or get, turned away from
federal job training programs, or lose federal aid for paying heating bills, or see
delays in cleaning up contaminated land in their communities." - David Wessel

10. MILITARY SPENDING
• Proposes $54B increase
• Won't cover costs intended for structural expansions planned
https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-
proposal/?utm_term=.ab2f3ae7a794

11. FUNDING CUTS TO CPB
• Sesame Street
• $450M/yr.
• 0.012% of federal budget
• $1.43/person in U.S.
• Benefit is 15% less likely to fall behind

12. IMPACT ON STATE & LOCAL GOV'T
Begin to become stretched out because:
• Rising Medicaid spending
• Pension Obligations
• Debt Repayments
Can't afford to take on the costs of programs that are cut out
results in:
• Higher taxes in the state & locally
• Vulnerable people left without food/shelter/etc.

13. INTERNATIONAL AFFAIRS
• 37% cut in the budget of the U.S. Intl. Affairs
Decreases ability to provide:
• Health Assistance
• Diplomatic & Consular Services
• Humanitarian Assistance
• Development Assistance
• U.N. Funds

14. INFRASTRUCTURE
• Budget proposal does not prioritize
• Increase in driving, heavier traffic in trade corridors, &
strained water infrastructure
• Water agencies alone need $600B
https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-
proposal/?utm_term=.ab2f3ae7a794

15. CONCLUSION
• Ideals are always different between different people
• Public Choice Theory (Majority Rule & Rational Ignorance)

16. WORKS CITED
• https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-
proposal/?utm_term=.e7f62d7716cb#dept-9
• https://www.brookings.edu/blog/fixgov/2017/03/16/four-key-points-on-trumps-
budget-proposal/
• https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blu
eprint.pdf