Highlights of President Trump’s 2021 budget plan

WASHINGTON (AP) — President Donald Trump’s fiscal 2021 budget plan doesn’t have many fans — among either his GOP allies or opposition Democrats — but it’s a measure of the president’s priorities as he seeks a second term.

News flash: It’s short on politically painful cuts to Medicare and Social Security, sometimes called the third rails of politics — touch them and you die — while proposing cuts to domestic programs that Trump himself has never tried to put into place.

Trump’s fiscal missive contains plenty of nuggets for budget geeks but little for Washington’s deficit scolds, who see its prescriptions for balancing the budget within 15 years as politically unbalanced and unrealistic.

A look at what’s noteworthy in the president’s budget:


Trump is again taking aim at the $1.4 trillion “discretionary” portion of the $4.8 trillion federal budget, proposing $2.1 trillion in cuts over 10 years from domestic agencies, foreign aid, and overseas military operations.

But such cuts run entirely counter to Trump’s actual performance as president, in which he’s signed two budget and debt deals that reversed prior cuts to both defense and domestic programs, along with three rounds of appropriations bills.

Trump’s budget plans an immediate 5% — $37 billion — cut to non-defense programs favored by Democrats and 2% cuts to such programs each subsequent year.


Trump’s budget preserves big gains in the Pentagon budget over the past few years, essentially freezing next year’s defense budget at current levels and allowing 2% growth each year through 2025 and freezing it after that. The $741 billion defense budget includes a 3% military pay raise, funds Trump’s space force initiative, and maintains readiness accounts.

But the budget plan also cuts back funding for overseas military operations that have been used to pad Pentagon budgets and seeks $5 billion in savings — including politically challenging cuts to about 50 Pentagon medical facilities across — to fund other defense priorities.


Yes, there are cuts to Medicare. And no, they wouldn’t throw Grandma off the program or raise her premiums, despite what Democrats say.

And yes, there are cuts to Medicaid. And yes, they will affect beneficiaries.

First, on Medicare, which serves seniors, Trump’s budget cuts are aimed chiefly at health care providers like hospitals. They are howling at longstanding proposals to deny hospitals higher reimbursement rates for outpatient services than other medical facilities. The budget would also cut payments for “post-acute” care provided for people discharged from hospitals.

Critics say the cuts — $465 billion over the coming decade — are so large that health care providers will be hurt and care will suffer, but the core Medicare program would remain intact.

Medicaid, the state-federal health care program for the poor and disabled, is a different story.

Trump’s latest Medicaid proposal would allow states that want more flexibility in Medicaid to accept their federal share as a lump sum; for states staying in traditional Medicaid, a 3% cap on cost growth would apply.


The budget would transfer the Secret Service back to Treasury from the Department of Homeland Security, a bureaucratic victory for Treasury Secretary Steven Mnuchin. The proposal is aimed at improving the government’s response to high-tech financial crimes and terror financing. The Secret Service was transferred to Homeland Security after the 9/11 attacks.


The budget proposes spinning off the Food and Drug Administration’s tobacco center into a separate agency. The FDA’s Center for Tobacco Products regulates traditional tobacco products and newer nicotine-based devices like electronic cigarettes.

For more than a year the FDA has struggled to reverse a surge in underage vaping driven by fruity, candy-like flavors in e-cigarettes. Last week the agency put in place new restrictions banning most flavors from small, reusable e-cigarettes like Juul, the leading brand among teenagers. But anti-tobacco advocates complain teens are already shifting to vapes not covered by the policy.

In November, senior White House official Joe Grogan complained that FDA’s oversight of tobacco and vaping was “a huge waste of time” that distracted the agency from focusing on treatments for cancer and other deadly diseases.

The budget states that spinning off the FDA’s tobacco operations would allow the agency “to focus on its traditional mission” of regulating food and drugs.