Defense ↑ Social Security ↓... Budget to Solidify Trump Supporters

$4.8 Trillion Budget Set for Next Year: Increased Defense and Veterans Affairs, Reduced Foreign Aid
Budget Targeted for Second Term in Office

[Asia Economy New York=Correspondent Baek Jong-min] The Donald Trump administration has set the 2021 fiscal year budget at $4.8 trillion (approximately 5728.8 trillion KRW). Defense and space development costs have been increased, and a new budget for the border wall has been established. On the other hand, budgets for social safety and foreign aid have been cut, which is interpreted as an effort to solidify support ahead of re-election. President Donald Trump is expected to announce the 2021 fiscal year budget (October 1, 2020 ? September 30, 2021) on the 10th (local time).

According to a report by The Wall Street Journal (WSJ) on the 9th, the defense budget was set at $740.5 billion, a 0.3% increase from the previous year, and the Department of Veterans Affairs budget will also increase by 13%. The policy to strengthen defense and support for veterans, which President Trump has continuously pursued, was applied again this time. The Department of Homeland Security (3%) and the Department of Energy’s National Nuclear Security Administration (19%) were also among the departments with increased budgets.

The budget for NASA, responsible for the project to send astronauts back to the moon by 2024, increased by 13%. Regarding the construction of the border wall with Mexico, which President Trump initially said he would not use the budget for, a new budget of $2 billion was included.

The non-defense sector was allocated only $590 billion, a 5% cut compared to this year. This is even below the level agreed upon last year between President Trump and the U.S. Congress. In particular, the foreign aid budget was cut by as much as 21%. Aid to Ukraine, which was a cause for the impeachment push against President Trump, was maintained at this year’s level. However, the budget for the International Development Finance Corporation (DFC), aimed at countering China’s foreign economic development funding, is expected to increase significantly from $150 million in the previous fiscal year to $700 million.

Along with various spending cuts, social safety net programs such as Medicare, Medicaid, and food stamps are also expected to see a budget reduction of $292 billion. President Trump stated in the budget plan that he would cut $2 trillion from mandatory spending programs, including these. This is part of a plan to reduce spending by $4.4 trillion over the next 10 years amid ongoing federal budget deficits caused by tax cuts and increased fiscal spending.

The White House projected an economic growth rate of over 3% in this budget plan. It estimated that the U.S. Gross Domestic Product (GDP) will grow by 3.1% in the fourth quarter of this year and by 3% in 2021.

This figure greatly exceeds the forecasts of economic analysis institutions. It contrasts with Treasury Secretary Steven Mnuchin’s expectation that the economic growth rate this year will fall short of 3% due to the Boeing 737 Max incident. The U.S. government also expects this year’s economic growth rate to be slightly lower than last year’s. The Trump administration set a goal of over 3% growth from its inception and raised hopes for achieving this goal when the economic growth rate reached 2.9% in 2018. However, last year it was only 2.3%, reinforcing the view that growth above 3% will be difficult for the time being.

This content was produced with the assistance of AI translation services.