US seeks $3.6 trillion spending cut to balance budget

Washington, May 23 (IANS) The Trump administration proposes a $3.6 trillion cut in government spending over the next 10 years to balance the federal budget, according to summary documents provided by the White House.

The budget plan, which will be officially released on Tuesday, calls for deep cuts in Medicaid payments, food stamps and disability benefits while keeping President Donald Trump's promise not to touch Social Security and Medicare benefits, Xinhua news agency reported.

"We are no longer going to measure compassion by the number of programmes, or the number of people on those programmes," Mick Mulvaney, Director of the White House's Office of Management and Budget, said on Monday.

"We're going to measure compassion and success by the number of people we help get off those programmes and get back in charge of their own lives," he said.

For fiscal year 2018, which starts from October 1, the budget plan would shift $54 billion from non-defence discretionary spending to defence by enacting major cuts to the State Department, the Environmental Protection Agency, the Education Department and other agencies.

The budget is expected to meet with resistance from both parties in Congress and start a new round of fiscal fighting in Washington.

Senate Majority Leader Mitch McConnell expected the Republican-led Congress to largely ignore the proposal, he said. Many Democrats have also opposed the steep cuts to non-defence discretionary spending in the budget.

The budget also claims to eliminate the federal deficit in a decade by accelerating annual economic growth from 1.6 per cent last year to 3 per cent by 2027 through tax reforms and spending cuts.

However, many economists are sceptical about the administration's growth assumptions.

US economic growth will average only about 1.9 per cent over the next 10 years, according to the nonpartisan Congressional Budget Office.

"We recently estimated that achieving sustained 3 per cent growth would either require productivity growth in excess of the country's 60-year record or else it would require productivity and capital growth and labour force participation to all reach or exceed the levels set in the booming 1990s," the Committee for a Responsible Federal Budget (CRFB) said.

"There is no justification for assuming such a high level of growth," said the CRFB, a nonpartisan watchdog group.