The U.S. government’s record 4.8-trillion-U.S.-dollar budget for the 2021 fiscal year, which continues the spending priorities in recent years, has revealed the administration’s favor for more defense spending and decreased funding for health programs.
The new budget includes a 2-trillion-dollar slash to safety net and food programs, as well as student loan initiatives, and a continued rise in defense expenditure and funds to build a border wall targeting illegal immigrants.
The new budget also requests maintained or increased funding for trade enforcement agencies such as the Office of the U.S. Trade Representative, which leads trade negotiations with other countries.
Analysts pointed out that U.S. trade focuses range from implementation of the U.S.-Mexico-Canada Agreement (USMCA) and the phase-one deal with China, to the first stage of the U.S.-Japan trade agreement, and plans to seek new agreements with the European Union, Britain and Kenya.
The Trump administration wishes to boost trade with other countries, as they believe that the more expanded the overseas market is, the more additional job opportunities can be created at home, the analysts said.
The budget also includes a significant increase in research spending for artificial intelligence and quantum information science in the new fiscal year, and proposes doubling the amount of non-defense R&D spending in those areas by the fiscal year 2022.
The budget request, while pouring more money into “higher priority” sectors such as defense and artificial intelligence, suggests that spending reductions in health programs, federal housing assistance, food stamp recipients and international aid are aimed at avoiding a larger fiscal deficit, observers say, noting that it is consistent with previous budget plans presented by the Trump administration.
In Trump’s first formal budget plan to Congress in March 2017, he proposed to increase the country’s defense spending by 54 billion dollars and offset that by slashing expenses in many domestic areas, including medical research, health and human services, environmental protection, education, and foreign aid.
The president also wanted to spend more money to step up immigration enforcement and build a wall along the border between the United States and Mexico.
His budget proposal for the fiscal year 2020, put forward in March 2019, continued to cut non-defense spendings to fund military buildup, including the establishment of the U.S. Space Force. The U.S.’ environment protection agencies and international aid programs were heavily impacted.
Analysts say the increased budget expenditure of the Trump administration over the past years is based on its optimistic assessment of the U.S. economy.
Although the U.S. economy grew at a rate of 2.3 percent in 2019, the 2021 budget proposal projects robust economic growth over the next decade, forecasting the Gross Domestic Product (GDP) will be 2.8 percent in 2020 and 3.1 percent in 2021, higher than market expectations.
The rising spending coupled with upbeat assessment of the U.S. economy, has driven the federal budget deficit higher, which reached nearly 1 trillion dollars in 2019, doubling the amount in 2015. Enditem