On Feb. 12, President Donald Trump submitted his FY 2019 budget request (“Budget”) to Congress. Even though congressional appropriators will simply toss the Budget aside when they start working on their own FY 2019 budget blueprint and spending bills, there are still some key figures and policy proposals worth mentioning.
Here is a quick sketch of the Budget:
(figures may not be exact due to rounding)
FY 2019 Total Receipts: $3.42 trillion
FY 2019 Total Spending: $4.41 trillion
FY 2019 Deficit: $984 billion
FY 2019 Federal Debt: $16.9 trillion
The Budget 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 ). The Internal Revenue Service (IRS) would receive $11.1 billion — much of the money would be put towards IT upgrades. Tucked away in the appendix, the Budget proposes to provide an additional $362 million for program integrity activities. Overall, the IRS request reflects a 6 percent decrease from 2017.
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 across various industries. McGuireWoods Consulting’s 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 SSN 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 $5 billion)
- Increase oversight of paid tax return preparers (reduces deficit by $457 million)