Trump's budget assault on aid, domestic programs draws quick resistance

By Roberta Rampton and Richard Cowan

By Roberta Rampton and Richard Cowan

WASHINGTON (Reuters) - President Donald Trump's first budget outline, calling for a security-heavy re-alignment of federal spending, drew quick resistance from the U.S. Congress, with especially strong criticism of proposed deep cuts to diplomatic and foreign aid programs.

Trump's plan, submitted to Congress on Thursday and showcasing his administration's economic priorities, is just the first volley in what will likely be an intense battle over spending in coming months. Although Trump's fellow Republicans control both the Senate and House of Representatives, Congress holds the federal purse strings and seldom approves presidents' budget plans.

Republicans applauded Trump's call for a 10 percent increase in military spending next year in a budget that would also finance construction of a wall on the border with Mexico and provide more resources for deporting illegal immigrants.

But even some conservative Republicans who traditionally fight for smaller government labeled as misguided the Trump administration's request for a 28 percent, or $10.9 billion, cut in State Department funding and other international programs.

Protecting national interests requires a comprehensive approach, "including not just military engagement but also the full and responsible use of all diplomatic tools at our disposal," said Republican Representative Hal Rogers, who chairs a panel that oversees State Department and foreign aid spending.

Representative Ted Yoho, a member of the right-wing House Freedom Caucus, said international programs were cost-effective, adding they "help advance U.S. national security interests at home and abroad and spur economic job growth.”

Trump's plan would eliminate the Overseas Private Investment Corporation that helps spur private investment in foreign development projects. Yoho called it “an amazing corporation” that he said helps generate billions of dollars in U.S. exports.

The budget also drew criticism internationally. The French ambassador to the United Nations, Francois Delattre, warned that cutting funding of global programs could fuel instability.

Democrats, whose votes would be needed later this year to sign off on the spending bills that implement any budget blueprint given the slim Republican hold on the Senate, attacked the proposed reductions to the Environmental Protection Agency and to programs that benefit the poor.

The White House proposal would inflict a 31 percent, or $2.6 billion, cut on the EPA.

Some veteran Republicans, including Senator Rob Portman, a former White House budget chief during the administration of President George W. Bush, vowed to preserve the EPA's Great Lakes restoration program that Trump wants to eliminate.

House Speaker Paul Ryan sidestepped reporters' questions about whether he supports State Department cuts, saying the White House blueprint was just the start of the budget process.

In a message with his budget, Trump said he aimed to advance "the safety and security of the American people," adding he would do so with $54 billion in added military spending next year and putting more money into deporting illegal immigrants.

Moderate Republicans expressed unease with potential cuts to popular domestic programs.

Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, attacked plans to cut or eliminate programs that help the poor pay heating bills, provide aid for localities to deal with wastewater and subsidize air travel in rural areas like her home state of Alaska.

"We need to remember that these programs are not the primary drivers of our debt," Murkowski said.

Other proposed reductions and cuts included community development grants at the Housing Department and more than 20 Education Department programs. Funding would disappear for 19 independent bodies that count on federal money for public broadcasting, the arts and regional programs.

"Throwing billions at defense while ransacking America’s investments in jobs, education, clean energy and lifesaving medical research will leave our nation weakened," said House Democratic leader Nancy Pelosi.

The budget outline covered just "discretionary" spending, or programs that must be renewed annually by Congress, for the 2018 fiscal year starting on Oct. 1.

It did not address mandatory "entitlement" programs, such as Social Security retirement benefits and federally-backed healthcare for the elderly, poor and disabled, that make up most of the federal budget. Conservatives have been clamoring for year for reforms to these programs to save money.

DEFENSE MONEY FOR CURRENT YEAR

Trump also asked for $25 billion more for core Defense Department programs for the current fiscal year, as well as $5 billion more for combat operations. A detailed copy of this request seen by Reuters showed some of the funds would be for procurement of technology such as F-35 fighter aircraft and drone systems.

About $13.5 billion of the supplemental request was earmarked for aircraft, missiles and ships. It included THAAD missiles, Blackhawk helicopters and F-35s made by Lockheed Martin Corp, as well as F/A-18 warplanes and Apache helicopters manufactured by Boeing Co.

Also for this fiscal year, Trump requested $3 billion more for the Department of Homeland Security, with some of that money intended for planning and construction of the border wall that he made a major part of his 2016 election campaign.

Congress will likely consider the supplemental request by April 28, when regular funding expires for most federal agencies.

On the 2018 budget, Trump is willing to discuss priorities with Congress, said White House budget director Mick Mulvaney, a former South Carolina congressman who made a name for himself as a spending hawk before he was picked to join Trump's Cabinet.

The budget outline does not incorporate Trump's plan for sparking $1 trillion in investments to build roads, bridges, airports and other infrastructure projects. The White House has said the infrastructure plan is still to come.

The planned defense increases are matched by cuts to other programs so as to not increase the $488 billion federal deficit.

Despite the proposed big cuts to the EPA and the State Department, Mulvaney said their "core functions" would be preserved.

Reflecting Trump's repeated election campaign pledge to reduce illegal immigration, the Department of Homeland Security would get a 6.8 percent increase, with more money for extra staff needed to catch, detain and deport illegal immigrants.

Trump wants Congress to approve $1.5 billion for the border wall in the current fiscal year - enough for pilot projects to determine the best way to build it - and a further $2.6 billion in fiscal 2018, Mulvaney said.

The estimate for the total cost of the wall will be included in the full budget. That more detailed document is expected in mid-May and will project spending and revenues over 10 years.

Trump has repeatedly said that Mexico will pay for the wall, and Mexico has adamantly said it will not. Since Trump took office in January, the White House has said funding would be kick-started in the United States.

The full budget plan will also include economic forecasts and the president's views on "mandatory entitlements" like Social Security and Medicare, which Trump vowed to protect while he was on the campaign trail.

(Additional reporting by Julia Edwards Ainsely, Patricia Zengerle, Timothy Gardner and Valerie Volcovici in Washington and Michelle Nichols in New York; Editing by Bill Trott and Frances Kerry)

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