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NUMBER OF THE WEEK: $4.4 Trillion
Photo: www.state.gov
The cost of President Donald Trump’s budget request for fiscal year 2019.
On Feb. 12, President Trump submitted his FY 2019 budget request (“Budget”) to Congress. For the second year in a row, the Treasury Department will not be issuing its “Greenbook” to accompany the budget request. The Greenbook is a document that contains detailed explanations of the tax proposals in an administration’s budget request. A Treasury spokesperson explained that there won’t be a Greenbook this year given the implementation of tax reform.
The Budget opens with a message from the president in which he highlights some of the administration’s successes in year one: a stronger economy, robust job creation, and the addition of nearly $5 trillion in new wealth to the stock market.
The top three priorities in the FY 2019 Budget are (1) ending wasteful spending; (2) expanding economic growth and opportunity; and (3) strengthening U.S. national security. The president also added his beloved border wall near the top of the to-do list.
Even though congressional appropriators will toss this Budget aside when they start working on their own budget blueprint and FY 2019 spending bills, there are still some key figures and policy proposals worth mentioning. Below is a quick sketch of the Budget.
Key Numbers
(figures may not be exact due to rounding)
FY 2019 Total Receipts: $3.4 trillion
FY 2019 Total Spending: $4.4 trillion
FY 2019 Deficit: $984 billion
FY 2019 Federal Debt: $16.9 trillion
The Budget’s policy proposals would reduce the deficit by $4.45 trillion in 10 years. Most of the reduction comes from the administration’s projected economic growth and cuts to both mandatory and discretionary spending ($1.8 trillion and $1.5 trillion over 10 years, respectively).
Unlike previous Republican budget requests, the FY 2019 proposal does not attempt to balance the budget, which has invited the ire of House Budget Chairman Steve Womack (R-AR).
Interestingly, the Budget also assumes that the individual tax provisions in the new tax law, which are set to expire after 2025, would be extended at a cost of $600 billion.
At the departmental level, the administration requests $12.3 billion for the Treasury Department (a 3-percent decrease from 2017 level). The Internal Revenue Service (IRS) would receive $11.1 billion — most of the money would be put towards IT upgrades. And tucked away in the appendix, the Budget proposes to provide an additional $362 million for program integrity activities. The administration’s request for the IRS reflects a 6 percent decrease from 2017 levels.
Select Policy Highlights
Below is a list of top 10 policy proposals in the Budget that may be of interest to our tax policy clients. The Tax Policy Update team will distribute a separate write-up later this week with a more comprehensive review.
- Private/public infrastructure investment (increases deficit by $199 billion)
- Reform Air Traffic Control (increases deficit by $125 billion)
- Repeal and replace Obamacare (reduces deficit by $675 billion)
- Eliminate wasteful spending in Medicare and improve drug pricing and payment policies (reduces deficit by $236 billion)
- Increase and extend guarantee fees charged by GSEs (reduces deficit by $25 billion)
- Require SSNs for CTC and EITC (reduces deficit by $10 billion)
- Restructure CFPB – reduces deficit by $6 billion
- Increase Medicare Part D plan formulary flexibility – reduces deficit by $5 billion
- Reauthorize the Oil Spill Liability Trust Fund excise tax – reduces deficit by $4.8 billion
- Increase oversight of paid tax return preparers – reduces deficit by $457 million
Click here to read the free version of this week’s Tax Policy Update.
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The McGuireWoods’ Tax & Financial Services Policy Group assists clients in understanding how the latest legislative and regulatory proposals anddecisions may impact their business and industry. To learn more about how our team can help you monitor, analyze, and navigate all relevant legislativeand regulatory developments, please contact any of our attorneys and consultants below at (202) 857-1700. For more information on how to subscribe toour weeklyTax Policy Update and tax news alerts, please contact Radha Mohan, rmohan@mwcllc.com, (202) 857-2944.
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Russell Sullivan |
Rosemary Becchi |
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Harold Hancock |
Charlie Iovino |
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Lai King Lam |
Radha Mohan |
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Anne C. Starke |
Daniel Chung
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