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Trump's $4.1T budget

President Donald Trump is sending Congress a $4.1 trillion spending plan that relies on faster economic growth and steep cuts to programs supporting low-income individuals to balance the government's books over the next decade.

The proposed budget, for the fiscal year that begins Oct. 1, was being delivered to Congress Tuesday, setting off an extended debate in which Democrats are already attacking the administration for trying to balance the budget on the backs of the poor. Lawmakers from both parties have said major changes will be needed as the measure moves through Congress.

The proposal projects that this year's deficit will rise to $603 billion, up from the actual deficit of $585 billion last year, But the document says if Trump's initiatives are adopted the deficit will start declining and actually reach a small surplus of $16 billion in 2027. However, that goal depends on growth projections that many private economists view as overly optimistic.

The government hasn't run a surplus since the late 1990s when a budget deal between Democrat Bill Clinton and congressional Republicans combined with the longest U.S. economic recovery in history produced four years of black ink from 1998 to 2001.

During the campaign, Trump attacked the weak economic growth of the Obama years, and pledged that his economic program would boost growth from the lacklustre 2 per cent rates seen since the recovery began in mid-2009. Trump's new budget is based on sustained growth above 3 per cent, sharply higher than the expectations of most private economists.

"The president believes that we must restore the greatness of our nation and reject the failed status quo that has left the American dream out of reach for too many families," the administration said in its budget which was titled, "The New Foundation for American Greatness."

According to budget tables released by the administration, Trump's plan cuts almost $3.6 trillion from an array of benefit programs, domestic agencies and war spending over the coming decade — an almost 8 per cent cut — including repealing and replacing Obama's health law, cutting Medicaid, eliminating student loan subsidies, sharply slashing food stamps, and cutting $95 billion in highway formula funding for the states. Cuts to a popular crop insurance program have already landed with a thud.



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