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Opinion: Trump Budget Would Hit NJ Hard, But That’s Not Going to Happen

The real power in the federal budgetary process lies with the appropriation committees. And it’s a good bet that Democrats and Republicans will find a way to compromise

Richard F. Keevey
Credit: Amanda Brown
Richard F. Keevey

The recently released Trump budget would do great damage to New Jersey. But the federal budget process is long and complicated and, in the end, the real power brokers — the appropriation committees in Congress — will assume control and there will be little reduction in federal assistance to New Jersey.

The budget proposed by Gov. Phil Murphy for fiscal year 2020 assumes the state receives $15.6 billion in federal assistance. The budget submitted to Congress by President Donald Trump proposes significant reductions to almost every program for which New Jersey and all states receive funds.

Programs for health and human services are reduced by 12 percent; housing programs by 18 percent; 31 percent reductions for environmental programs; transportation programs down by 19 percent; education programs by 12 percent; and labor programs are reduced by 10 percent.

Furthermore, beginning in 2020 and continuing for the following years, almost $800 billion in nationwide Medicaid funds would be reduced. New Jersey has one of the largest Medicaid programs in the country, so there would be significant consequences here. Deep cuts are also made to the food stamp and the temporary assistance for needy families (TANF) programs. The community development grant program would be eliminated.

Severe impact

I could go on but suffice to say state and local government programs in New Jersey would be severely impacted. A quick calculation suggests New Jersey would lose at least $2 billion in federal funds — plus bigger Medicaid reductions in each succeeding year based upon proposals to change the funding mechanisms.

A strong military is necessary, but funding levels are overdone in the Trump budget, with large increases that are in addition to significant increases in the current year. Overall defense spending would increase by $35 billion or 5 percent and homeland security funding would increase by 7 percent. Almost $9 billion is requested for a wall on the U.S.-Mexico border but no money is proposed for the decaying and critical tunnel between New Jersey and New York.

The worst in our nature

More bad news. The overall federal budget increases to $4.74 trillion, a 15 percent increase. The budget is riddled with gimmicks; tax cuts, principally benefiting corporations and wealthy individuals remain in place; aggressively optimistic economic assumptions are included; deficits reach $1 trillion (the deficit was $587 billion in 2016); and the nation’s gross debt will approach $35 trillion in 2029 — over 100 percent of gross domestic product (GDP) — the first time since WWII.

This is the most irresponsible federal budget in the history of our nation. Not only does it have scant possibility of passing — some call that possibility a fantasy — but, unfortunately, it presents a view of America that is the worst of our nature and contains a personal attitude that seeks reductions to programs that help people.

This budget proposal is about Trump’s philosophy, not what is needed.

Do not despair. Help is on the way for those interested in a more realistic and humane budget. The budget process in the federal government is long, diffuse and complex. The only numbers that count in the end are those developed by the two congressional appropriation committees and their 12 sub-committees.

In a typical state, the budget process is quite defined, and the legislative branch reviews the governor’s budget in detail and makes changes. The federal process is much different. It is much more convoluted and limits what the president can ultimately do, especially at the end where he has no line-item veto power, as our governor and most governors have.

The details of the federal budget process are quite complicated. If I went through each step you would fall asleep. Suffice to say the president’s budget is immediately turned over to the two budget committees of the House and Senate. These committees are charged with developing the overall broad congressional budget goals and numbers. There is no requirement to follow what the president has submitted.

A long shot

These broad guidelines, including dollar allocations for the departments of government, are then transmitted to the chairs of the House and Senate appropriation committees. These chairpersons work with 12 sub-committees to frame the final appropriation bills for each federal agency. The 12 appropriation bills (or, on rare occasions, one omnibus appropriation act) are then presented to the full Congress for approval — and then subsequently transmitted to the president for his approval. He either signs the bills or disapproves — he has no line item-veto. Failure to approve would close down his government. Think that will happen again?

What do you think the chances are the president’s proposal will be approved as submitted? My guess is “zero.” The real power brokers in the federal budget process are the appropriation committees in each house. And these folks, except the extreme fringe, genuinely respect and understand the need for the programs they oversee. They will approach their duty with integrity and thoughtfulness.

My educated guess is that Democrats and Republicans will compromise. They will make some marginal reductions to current spending levels (some programs will actually be increased) and the final appropriation acts will look nothing like what the president submitted. The president will sign the appropriation act(s) and then complain on Twitter.

Unfortunately, no one — neither the president nor Congress — will have made any progress in addressing the mounting deficits and debt in a rational and thoughtful manner. Of course not — that is difficult public policy work needing cooperation by all sides.

Let’s see if I am correct on October 1, 2019 — that New Jersey loses very little if any federal aid.

What a way to run an almost $5 trillion corporation affecting 320 million people.

Richard F. Keevey is the former budget director and comptroller for New Jersey — appointed by two governors from each political party. He was appointed by the president as the CFO at HUD and then deputy undersecretary of defense for finance. He is currently a distinguished practitioner in residence at the Bloustein School of Planning and Policy at Rutgers University and a Lecturer at Princeton University. He is an elected Fellow of the National Academy of Public Administration.

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