On April 3, President Trump sent to Capitol Hill his proposed Fiscal Year (FY) 2027 budget proposal. The $2.2 trillion package, which increases overall spending by about 15 percent over last year, calls for significantly more money for defense but proposes deep cuts in social program spending.

Most of the proposed budget’s increased spending would go to defense—the President is asking for $1.5 trillion in defense spending, a 43 percent increase over last year. Only two non-defense agencies would get increased budgets under the President’s proposal (Veterans Administration (VA) and the Department of Justice (DOJ)).

Under the President’s budget proposal, non-defense discretionary spending would go down by about 10 percent ($73 billion) over last year’s spending levels. The Department of Labor’s (DOL’s) budget would shrink by some 26 percent ($3.5 billion). The Small Business Administration (SBA), including its loan programs, would go down by 67 percent ($700 million). The SBA proposal also includes a recommendation that the SBA impose an administrative fee on SBA guaranteed business lending program lenders. The Department of Health and Human Services (HHS) would have to absorb a 20 percent decrease while the Treasury Department’s budget would be 12 percent, or $1.5 billion, smaller than last year.

The budget proposal submitted to Capitol Hill on April 3 did not contain most of the supporting details that lawmakers need to construct a budget that will become law. Those details, the Administration says, will be sent to the Hill by the end of April. Missing from the April 3 submission are specific proposals, some of which are widely expected. For example, most Washington insiders anticipate a call from the President to enact “Trump Accounts for Adults,” a new retirement savings program for those whose employers do not offer a workplace retirement savings plan. There were no specific tax proposals in the April 3 budget submission.

Also of interest: The budget proposal does include a call to use the Budget Law’s reconciliation process to enact an all-GOP budget bill by June 1. Specifically, the call to do a reconciliation bill is focused on the need to fund the Department of Homeland Security (DHS). The President wants three years of funding for DHS, so that the political struggle over immigration (ICE and Border Security) reforms cannot recur for the duration of President Trump’s term in a way that would require Democratic votes to resolve.

Prospects: All presidential budget proposals, regardless of partisan control, represent the President’s “wish list” and priority agenda items. This one is no exception. While lawmakers may decide to include some elements of this budget proposal in the budget/appropriations legislation that they will craft, there is virtually no chance that Congress will accept this budget proposal “as is.” The budget process will start on or around April 14, when Congress returns from its spring recess. Whether it can be concluded by President Trump’s demanded June 1 deadline remains to be seen. Frankly, most Washington insiders—on and off the Hill—are skeptical about what would be a very tight timeframe for resolving numerous highly controversial decisions.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.