Trump slashes foreign aid in new budget proposal

U.S. President Donald Trump on Monday proposed a 21 per cent cut in foreign aid and slashes to social safety-net programs in his $4.8 trillion (£3.7 trillion) budget proposal for fiscal 2021.

The budget would spend money to fund infrastructure projects and defence, but would also raise funds by targeting $2 trillion in savings from mandatory spending programs in the United States. It assumes revenues around $3.7 trillion.

The president’s latest blueprint for administration spending proposals is unlikely to be passed by the Democratic-controlled House of Representatives, particularly in an election year.

Trump, who campaigned for the presidency in 2016 on a promise to build a wall along the U.S. border with Mexico, will seek $2 billion in funding for further construction on that project, substantially less than the $8.6 billion he requested a year ago.

The budget seeks money to fund a U.S. infrastructure overhaul that both Democrats and Republicans have said is a priority. The two sides are unlikely to agree on any major legislation this year, though, as they fight for control of the White House and Congress in the November elections.

The budget would raise military spending by 0.3% to $740.5 billion for fiscal-year 2021, starting on Oct. 1 and propose higher outlays for defence and veterans, administration officials confirmed.

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But former Chairman of the Joint Chiefs of Staff Mike Mullen raised concerns about how the foreign aid cuts would affect the U.S. civilian footprint around the world that helps reduce the need for military intervention.

“In an era of great power competition, cutting these critical investments would be out of touch with the reality around the world,” he wrote in a letter to top congressional leaders. “This is a moment when more investment in diplomacy and development is needed not less.”

Trump’s foreign aid proposal seeks $44.1 billion in the upcoming fiscal year, compared with $55.7 billion enacted in fiscal 2020, an administration official said.

The U.S. government ended fiscal 2019 with the largest budget deficit in seven years as gains in tax receipts were offset by higher spending and growing debt-service payments, the Treasury department said on Friday.

The budget forecasts $4.6 trillion in deficit reduction over 10 years and assumes economic growth will continue at an annual rate of roughly 3 percent for years to come, officials said. Trump has taken credit for the strength of the U.S. economy, thanks in part to tax cuts he championed and Congress passed earlier in his term. The budget funds an extension of those cuts over a 10-year period with $1.4 trillion.

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The budget also proposes $1.1 billion for cybersecurity efforts by the U.S. Department of Homeland Security.