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  May 29th, 2017 | Written by

Trump Budget Slashes Infrastructure, Undermines Exports

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  • Trump seeks to balance the federal budget by 2027 with massive spending cuts.
  • The president’s budget cuts $95 billion from the Highway Trust Fund, slashes the Capital Investment Grant program.
  • The president’s vocal opposition to free trade threatens to impede growth.

The Trump administration sent its proposed budget for fiscal year 2018 to Capitol Hill last week, and it was astonishing for what it lacked, in light of the president’s campaign promises and current rhetoric.

The much touted trillion-dollar infrastructure program was funded to the tune of 20 percent, while the budget also slashed funding to basic and longstanding transportation programs. The budget, which seeks to balance the budget by 2027 with massive spending cuts, from infrastructure to social programs, would also undermine efforts of United States agricultural exporters to market their products overseas.

Experts also say that between large tax cuts for the wealthy, spending increases for defense and security, and the assumptions the budget makes about economic growth, the numbers simply don’t add up.

The president’s budget does commit $200 billion in new federal support for infrastructure, but it simultaneously cuts $95 billion from the Highway Trust Fund, slashes in half the Capital Investment Grant program, which supports transit and rail projects, and cancels 50 projects currently in the pipeline. It also drastically cuts the Maritime Security Program, which boosts the US-flag sealift capacity of the Armed Forces and hollows out TIGER grants, which direct investments to multimodal transportation projects that support port and other international trade infrastructure.

“President Trump contradicted his own calls for a $1 trillion investment in our infrastructure by releasing a budget yesterday that proposes significant cuts to critical transportation programs,” said Edward Wytkind, president of the Transportation Trades Department, AFL-CIO. “Plain and simple, this budget would idle major infrastructure upgrades and saddle businesses with an aging and ineffective freight and passenger network.”

The administration budget also proposes eliminating the Foreign Market Development Program and the Market Access Program, which could result in an average annual decline of $14.7 billion in US agricultural exports, according to a study by Texas A&M University. The budget would severely cut funding for food aid programs, also compromising exports. Representatives of rice and wheat exporters called on Congress to reject these proposals.

“It would literally gut our ability to promote wheat in a competitive way overseas,” said Steve Mercer, a spokesperson for US Wheat, an industry group.

A report from the conservative American Enterprise Institute calls the Trump budget “too good to be true,” relying as it does on three unrealistic assumptions to produce “the mirage of a balanced budget.”

The budget shows no reduction in federal revenue, even though the administration has promised sweeping tax cuts.

The plan also relies on massive reductions in non-defense discretionary programs—from today’s 3.2 percent of the economy to 1.4 percent in 2027—but the cuts specified in the budget “fall far short of yielding the envisioned savings.” “The plan also assumes that the federal government can spearhead $1 trillion of infrastructure spending while paying only one-fifth of the total cost,” the AEI report noted.

The budget plan also assumes rapid economic growth, envisioning a 2027 economy 10 percent larger than other forecasters estimate. “The budget plan and the administration’s other economic policies clearly cannot attain that ambitious goal,” said the report. “Indeed, the president’s vocal opposition to free trade threatens to impede growth, both at home and abroad.”

For those who find these developments disturbing, congressional leaders provide a measure of comfort. Many, including Republicans, have declared the budget dead on arrival.