THE PRESIDENT’S BUDGET IS INTERESTING, BUT IS FAR FROM A BLUEPRINT

Call us contrarians here at Allen Federal, but we think that the usual “all out” discussion of the President’s budget request, submitted to Congress last week, is a bit over-blown.  Certain provisions, such as a wholesale change to low-income food assistance and federal worker pay-for-performance, are simply going nowhere.  Other parts of the proposal for priorities like DOD and VA funding are hardly new.  Perhaps the biggest factor, though, is that unless this Congress gets its act together and passes FY’19 appropriations bills by October, it will be the next Congress that passes final spending bills.  We could, indeed, be looking at a different Congressional landscape after the November mid-term elections, making the President’s request all the more problematic.  The best bet is that FY’19 will end up looking a lot like what FY’18 is shaping up to be:  increased funding for DOD and politically-favored domestic programs with minimal tweaks elsewhere.  What should be getting attention, however, is the truly scary budget number that is actually right on track:  The percentage of the budget that’s comprised of “mandatory spending” (debt service, Medicare, Social Security, etc.).  Such spending is scheduled to stand at 62% of all federal outlays.  That number continues to expand every year.  Although it is politically unpalatable to address this, ignoring it won’t make it go away.  Contemplate that while perusing the IT proposal.